By Mark Doyle BBC World Affairs Correspondent

Investigators are constantly following al-Qaeda's financial trail

A small handful of diamonds is worth a suitcase full of cash, is easier to smuggle, and cannot be traced in the same way as traditional money.

For these reasons, according to a new book by American author Doug Farah, senior named al-Qaeda operatives bought millions of dollars worth of Sierra Leonean diamonds after they had been smuggled into neighbouring Liberia.

Mr Farah, a reporter for the Washington Post, first came across the story when a source in Liberia saw that the journalist was carrying a dossier of FBI "wanted" pictures alleged to show senior al-Qaeda officials.

The Liberian told Mr Farah: "I know those men".

The source was cross-checked.

The detailed revelations concern the period just before the attacks on the World Trade Centre in 2001, but much of the diamond trade is unregulated - meaning it could still be taking place.

Still trading?

The former United States Ambassador to Sierra Leone, Joe Melrose, told the BBC he found the new book credible.

He claimed that al-Qaeda had hidden suspect cash by buying gemstones, and could still be doing so now.

"Certainly they were laundering some. I've never had a great deal of doubt about that and I've spoken to people in the Sierra Leone government who say they've never had that doubt as well," Mr Melrose said.

Diamond trading has funded recent wars in Africa

"My concern is that it happened and it could happen again."

Since 2001 a new procedure for regulating diamond exports is supposed to have come into force.

Known as the "Kimberley process" after the diamond mining town in South Africa, it aims to stop diamonds being used to fund wars.

But the regulations are still voluntary and there are numerous loopholes that can be exploited.