The raids were carried out by special RAID and GIPN intervention forces in several cities including Toulouse, where four Jews and three soldiers were killed earlier this month by al Qaeda-linked militant Mohammed Merah.
A police source said most of the suspects arrested were believed to be close to a radical Islamist group called Forsane Alizza that was recently outlawed, Reuters reported.
The police also seized guns and a bullet-proof vest in the raids.
Sarkozy has sharpened his anti-militancy stance in the run-up to the French presidential election in April-May. A centerpiece of Sarkozy's re-election campaign is the terrorism question.
It's our duty to guarantee the security of the French people. We have no choice. It's absolutely indispensable, Sarkozy said in an interview on Europe 1 radio.
The president vowed to conduct more such swoops to crack down on extremists.
There will be further operations, allowing us to expel a number of people who have no business in the country, he added, signalling more such actions if he is re-elected.
Sarkozy also justified France's decision to deny visas to four Islamic preachers, saying the government does not want people “who advocates values contrary to the republic.”