By Jonathan Paye-Layleh BBC, Monrovia

Liberia has rejected allegations that it helped members of Osama Bin Laden's al-Qaeda movement operate an illegal diamond trade in the country.

A Washington Post article on Monday said an investigation into al-Qaeda financing had uncovered evidence that the governments of Liberia and Burkina Faso had hosted two senior al-Qaeda operatives on a $20m diamond-buying spree.

Liberia has long denied accusations that it has been profiting from the smuggling of "blood diamonds" from neighbouring Sierra Leone, and sanctions were imposed on the country in 2001.

But a statement in Tuesday's edition of the government-owned New Liberia newspaper said the Washington Post reporter was "an enemy" of the Liberian Government and was seeking to smear Liberia's image.

"Liberia is above the stage of collaborating with terrorists," the statement said, adding that its war against Lurd rebels meant it was fighting terrorism itself.

Demonising

The government said diamond-smuggling and gun-running allegations against Liberia were not new.

Taylor faces sanctions and security problems

"These blatant acts of demonisation constitute a continuation of an international conspiracy against Liberia," the statement said.

According to the Post, the investigators, who came from several countries, concluded that President Charles Taylor had arranged to harbour the operatives for at least two months after the 11 September attacks on New York and Washington in 2001.

The report quotes investigators as saying that the two operatives moved between a protected area in Liberia and neighbouring Burkina Faso.

It adds that a group of people buying diamonds on their behalf were also simultaneously attempting to procure sophisticated weapons, such as anti-aircraft missiles.

Sanctions

The latest row came as President Charles Taylor called on Liberians to demonstrate against America's policy towards Monrovia.

President Taylor told supporters of his ruling party that the United States had championed the strangulation of the Liberian Government and people through its foreign policy.

He said the war with Lurd rebels could soon be over if the US Government would condemn the insurgency and ask the government of Guinea to stop supporting the rebels.

The United States embassy here has not yet reacted to the president's comments.