Daniel Cowart, 20, and Paul Schlesselman, 18, were arrested in Tennessee on Wednesday and charged with possession of firearms, threats against a presidential candidate running and conspiring to rob a gun store, the Department of Justice said.
The plot is understood to centre on Tennessee where Martin Luther King was assassinated exactly 40 years ago.
Details of the conspiracy were contained in court records unsealed on Monday by members of the Bureau of Alcohol, Tobacco, Firearms and Explosives – America’s specialist law enforcement agency.
ATF agents said they disrupted plans by white supremacists to rob a firearms store and attack a predominantly black school.
According to the ATF, the men planned to go on a killing spree across the United States with Mr Obama, the Democratic nominee who is poised to become the country’s first black president, as their final target.
Brian Weaks, an ATF agent, told a Memphis court on Monday that the pair had men discussed a "killing spree to include targeting a predominantly African-American school". The ATF said that the two men did not identify the school by name.
He continued: "They further stated that their final act of violence would be to attempt to kill/assassinate presidential candidate Barack Obama," he added, as the two men appeared before the federal court.
Cowart, from Bells, Tennessee, and Schlesselman, from Arkansas, met on the Internet a month ago and have "very strong beliefs and views regarding ‘White Power’ and ‘Skinhead’ views," Mr Weaks told the court.
He said that Cowart had bought one rifle and stockpiled two handguns, both stolen from his grandfather. They planned to steal another high-powered rifle from a gun store in Jackson, Tennessee, as well as a series of robberies to finance their bloody actions.
"Schlesselman stated that they planned to drive their vehicles as fast as they could toward Obama shooting at him from the windows.”
"Both individuals stated they would dress in all white tuxedos and wear top hats during the assassination attempt. Both individuals further stated they knew they would and were willing to die during this attempt."
Jim Cavanaugh, special agent in charge of the Nashville field office of the ATF said the two skinheads planned to shoot 88 black people and decapitate another 14. The numbers 88 and 14 are held to be symbolic by white supremacists and relate to nationalist leader David Lane as well as Adolf Hitler.
Details of the alleged plot emerged just before Mr Obama arrived in Pittsburgh for a campaign rally after an earlier visit to Canton, Ohio.
Advisers remained tight lipped but said there were no plans for the candidate to make any reference to the ATF’s announcement.
It was not known how detailed the alleged plot was, how far advanced it was or how feasible the plan. Agents said that the two men did not identify the school by name.
"They said that would be their last, final act – that they would attempt to kill Sen Obama," said Mr Cavanaugh. "They didn’t believe they would be able to do it, but that they would get killed trying."
In August, three men with suspected links to white supremacist groups were arrested with rifles and a telescopic sight amid fears of a plot to assassinate Mr Obama during the Democratic convention.
It was reported that one of the suspects had told authorities they were "going to shoot Obama from a high vantage point using a … rifle … sighted at 750 yards". When one of the suspects "was directly asked if they had come to Denver to kill Obama", a police source said, "He responded in the affirmative".
But there were no charges in connection with any assassination plot and the authorities later indicated that the men were drug addicts and petty criminals who had no plans to kill anyone.
The civil rights leader Dr Martin Luther King, was assassinated in the southern US city of Memphis, Tennessee, in 1968 where he was to lead a march of sanitation workers protesting against low wages and poor working conditions
He was shot in the neck as he stood on a hotel balcony and died in hospital soon afterwards.
Five years earlier, John F Kennedy was hit in the head and throat when three shots were fired at his open-topped car in Dallas, Texas.
The numbers 88 and 14 are significant to white supremacists because of the American white nationalist leader, David Lane, who died while serving a 190-year prison sentence for murder, racketeering, and conspiracy in May last year.
During his incarceration he wrote an essay entitled ’88 precepts’ in which he put forward his plan for establishing a white society.
The essay is used by white supremacist groups as the basis of their beliefs.
Lane’s ’88 precepts’ was an expansion on his 14 words which he said summed up his views. Lane said: "We must secure the existence of our people and a future for White children." He added that this was necessary "because the beauty of the White Aryan woman must not perish from the earth".
It is also thought that the number 88 is also used by white supremacists to represent "Heil Hitler", because "H" is the eight letter of the alphabet. The Telegraph (UK)