Police: "We are very close"

The 38-year-old journalist vanished two weeks ago from Karachi, where he was trying to trace Taleban or al-Qaeda leaders who may have fled Afghanistan.

"There is a connection to Jaish in Pearl's kidnapping," a senior police official, who was not named, told the Reuters news agency.

Both the Pakistani police and the US State Department have named a British-born member of Jaish-e-Mohammad, Sheikh Omar Saeed, as being at the centre of the investigation.

Mr Omar was freed from prison in India in 1999 as part of a deal to secure the release of passengers on a hijacked Indian Airlines plane.

Wife's appeal

The Jaish-e-Mohammad (Army of Mohammad) has been banned by both the US State Department and the Pakistan Government for alleged terrorist activities.

Based in Pakistan, it has also been linked to militant attacks in Indian-administered Kashmir, and was blamed by India for attacking its parliament last December.

Mr Pearl's pregnant wife, Mariane, has made another impassioned appeal for her husband's release.

"By holding Danny they are preventing a man from writing about their concerns and accomplishing his chief work," she told Pakistan's The Nation newspaper.

Mr Pearl was trying, she said, "to create a bridge between cultures so we can start finding true solutions to the conflicts that are causing so much suffering in the world".

Arrests

The three men arrested in Karachi are said to have told police that they were not involved in the kidnapping.

They say they were given the photographs by someone else with instructions to send them, and do not know the current whereabouts of Mr Pearl.

Police have intensified the hunt for Mr Pearl

US Deputy Treasury Secretary Kenneth Dam said he was impressed with Pakistan's efforts to solve the case.

A previously unknown group calling itself the National Movement for the Restoration of Pakistani Sovereignty had sent two e-mails with photos of Mr Pearl.

They set two deadlines which have now passed, threatening to kill him if their demands were not met.

Prime suspects

Police have named three other people they want to talk to - Hashim Qadir, Mohammad Bashir and Imtiaz Siddiqui, who is said to have telephoned Mr Pearl twice.

Daniel Pearl: Had been working on a story about Islamic groups

Police say they may have been involved in putting Mr Pearl in contact with the leader of an Islamic group he was on his way to meet when he disappeared.

"We will only come to know the extent of their involvement once they are arrested," a police official said on condition of anonymity.

Pakistani authorities are determined to find Mr Pearl before President Pervez Musharraf visits the United States next week.

The police chief in Sindh province, Mukhtar Ahmed Sheikh, told the Associated Press: "We know who has Daniel and we are very close."

"We might conclude the whole thing very soon, sooner than you think."

Wall Street Journal managing editor Paul Steiger has written another open letter to the kidnappers, pleading for them to make contact again.