Thousands of police and military personnel mounted one of the biggest security operations ever seen in Canada today as Toronto braced for a threatened terrorist attack on its heavily traveled subway and bus lines.

The threat by a group identifying itself as the Armenian Secret Army for the Liberation of Our Homeland, which mounted a siege at the Turkish Embassy in Ottawa last month, has raised the rare specter of random political violence in Canada.

Security for Prime Minister Brian Mulroney and other public figures has been stepped up and antiterrorist investigations put on an emergency footing since the threat was revealed last week.

In a move that spurred intense controversy, police said Friday that they had allowed the deadline to expire on a demand by the Armenian group.

The group said in a communique that it would set off three bombs on the Toronto public transit system today unless three men held by Canadian authorities were freed. The men, of Armenian background, were arrested after a security guard was shot and killed in the hostage-taking incident March 12 at the Turkish Embassy in Ottawa.

In the face of this threat, transit officials said today that a third to half of the 1.5 million commuters who usually ride subways, buses and streetcars found other means of reaching work during the morning rush hour.

Although the early hours of the day passed without incident, nerves were frayed by a number of crank calls and hoaxes, including one fake bomb -- a loaf of bread wired to a clock -- found in a subway station.

The transit system repeatedly was halted while police checked out reports of suspicious packages.

"It was very strange riding the subway," said Nilu Balsara, a 19-year-old student. "Everybody was staring suspiciously at each other. I was afraid to reach into my bag."

As the day wore on, the mood was quiet but anxious in this city of 2.9 million. "I came down to work on the subway this morning, but I must confess I had butterflies all the way," said Patti Blais, a receptionist. "I'm taking a taxi home."

In the morning, religious and public figures made a show of taking the subway in defiance of extremists.

"A large city like this cannot be held hostage," explained an angry Julian Porter, a chairman of the transit commission.

Since 1960s and early 1970s, when bombings and one major political kidnaping erupted out of the Quebec separatist movement, this nation has been relatively free of terrorism.

But the Cabinet official responsible for federal police affairs, Solicitor General Elmer MacKay, said today that he hoped the Toronto threats would not be the beginning of a string of similar flare-ups.

His comment added to a heated debate over the wisdom of making last week's threat public, a move many believed played into the hands of the Armenian group and other would-be terrorists.

"I wouldn't have done that," said Porter. "You create a great deal of havoc without gaining a great deal of advantage."

Experts from cities in the United States and Britain cast doubt on the decision to go public in interviews featured in Toronto newspapers this weekend.

But many local leaders backed Toronto police chief Jack Marks, who argued it was "in the public interest" to let citizens know about the possible danger.

Many Toronto residents dismissed the bomb scare as an April Fool's Day hoax or were fatalistic about taking public transit.

"No, I'm not scared," said Chung Shee Kwong, 54. "It might be tough for the policemen but not for me."

But officials said the threat had been analyzed by local police and federal security officers and should be taken seriously because of past attacks by Armenian terrorist groups. They are thought to have been responsible for more than 60 deaths and 200 injuries during the past decade.

About 40,000 ethnic Armenians live in Canada, and police sources have been quoted as expressing suspicions that the group behind the current threat may be linked to others using Canada as a base to orchestrate terrorist activities around the world.

The terrorists, some of whom are thought to have been trained by Palestinian extremists, are protesting an alleged massacre in 1915 in which about 1.5 million Armenians living in Turkey are said to have died.