Acting on a tip from an American arms dealer, U.S. Customs agents stormed on Austrian airliner at Houston Intercontinental Airport and seized $1.2 million in automatic rifles, grenade launchers, handguns, and ammunition apparently needed for South Africa.

Two Britons, described as European arms dealers, and the four-man crew of the airliner were arrested in what Customs official called the largest weapons seizure in agency history.

The men were charged today with violations of the Neutrality Act, which prohibits unauthorized export of weapons. Bond was set at $1.5 million each.

The raid occurred Tuesday night, capping a three-week investigation. The weapons cache included 1,146 M16 rifles, 100 grenade launchers, 339 handguns and 15,000 plastic M16 magazines, according to Don Winkler of Customs.

The men carried a phony State Department license permitting export of the weapons, according to Charles Conroy, a Customs spokesman. Customs agents believe the weapons were bound for the South African government, in violation of U.N. Security Council ban on weapons shipments to that country.

"These are military weapons, not sporting weapons," Conroy told the Associated Press. "I don't feel this is completely over yet. Some details haven't surfaced."

The weapons were manufactured by Colt Industries in Connecticut and shipped to Houston by truck, closely followed by federal agents. The weapons were paid for by a $1.2 million line of credit from a European bank. Customs officials would not name the bank.

Customs officials were tipped to the deal three weeks ago by an arms dealor described as a former member of the Border Patrol who does business in the Houston area, according to Norman Buselmeier, senior special agent in the Customs office in Houston.

The arms dealer, Buselmeier said, told customs that two men had contacted him about purchasing more than $1 million in weapons. The men reportedly carried a certificate indicating that the weapons were to go to the Sudan in Africa, but the American arms dealer told Customs that he believed the weapons were going somewhere else. What made the arms dealer suspicious is not clear.

Customs officials contacted Colt Industries, which cooperated with the investigation "100 percent," Buselmeier said.

The arms were still in wooden cases when they arrived in Houston. Customs agents seized them as they were being loaded into the airliner. The men offered no resistance.

The plane was registered to a company called Montana Austria. Hans Joerg Stoeckl, the firm's manager in Vienna, told the Associated Press the shipment was contracted by Servotech, a company registered in Lichtenstein.Stoeckl said he was told the shipment was "steel fabricates," adding that his company was assured that the cargo would not violate the law.