A US court in Charlotte, North Carolina, has convicted two Lebanese brothers on charges of helping to channel funds from tobacco smuggling to the Lebanese militant group, Hezbollah.

Today, the United States' war on terrorism took a step forward

US Attorney's Office

Muhammad Hammoud and his brother Chawki Hammoud were accused of financing the group's activities through a scheme to smuggle cigarettes from North Carolina, where tobacco taxes are low, to higher-tax states for re-sale.

The US Attorney's Office said the verdict showed that terrorists and their supporters would not be safe from prosecution.

The authorities have accused the Hammoud brothers of organising a cell of Hezbollah - which the US consider a terrorist organisation.

The US has vowed to prosecute terrorists and their supporters

Muhammad Hammoud faces a maximum sentence of life in prison, as the leader of the ring.

Both he and his brother Chawki were found guilty of cigarette smuggling, credit card fraud, money laundering and racketeering.

During the trial, Muhammad Hammoud denied a Hezbollah support cell existed in Charlotte and said he was not a member of the group.

But he did sympathise with its resistance to the Israelis, he said.

Defence lawyers for the two men said they planned to appeal the verdicts after the men are sentenced. No sentencing date has yet been set.

Operation Smokescreen

The Hammouds were among 18 people arrested in July 2000 in the Charlotte area and in Michigan after a Federal Bureau of Investigation sweep dubbed Operation Smokescreen.

The ring bought cigarettes in North Carolina, which has relatively low cigarette taxes of five cents per pack, and sold them in Michigan, where taxes are 75 cents a pack.

The profits were then used to smuggle money to Hezbollah in Lebanon.

Among the 18, Said Muhammad Harb pleaded guilty in April and agreed to testify against the others.