updated 5/19/2007 7:17:00 PM ET 2007-05-19T23:17:00

Two New York City police officers were jailed Saturday in New Jersey on accusations of trying to steal drugs and money from a suspected drug dealer.

Hector Alvarez and Miguel Castillo, both 28, were charged with attempted kidnapping, armed robbery, armed burglary and other offenses, according to the Bergen County Prosecutor’s Office.

Authorities said a Rutherford resident saw the two off-duty officers fighting with his neighbor Friday morning. The officers said they were on official business and conducting a terrorism investigation, the prosecutor’s office said.

Prosecutors said the officers left in their vehicle, and Rutherford detectives stopped them soon after. Detectives found a crow bar, sledgehammer and bullet resistant vest in the back of the officers’ vehicle.

Bail was set at $1 million each. Prosecutor John L. Molinelli didn’t immediately know whether Alvarez and Castillo had lawyers.

The New York Police Department said internal affairs officers were investigating. Department spokesman Paul Browne said both officers were suspended immediately after their arrests and resigned shortly afterward.

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