The US Government has declared that a US-based Muslim charity is a terrorist financier with links to Osama Bin Laden's al-Qaeda network.

The finances of the Benevolence International Foundation (BIF) have been frozen, along with those of two affiliates in Canada and Bosnia, said the US Treasury Department.

US designation of these financiers of terror will... strip them of their ability to fund evil

US Treasury Secretary Paul O'Neill

The department's statement says BIF's head, Enaam Arnaout, "worked... to purchase and distribute [weapons] to various mujahideen camps, including camps run by al-Qaeda."

Earlier this week, the same charity had its funds frozen by the UK Treasury which accused it of diverting funds to the al-Qaeda terror network to help it build a nuclear weapon.

'Bin Laden authorisation'

Mr Arnaout - a Syrian-born US citizen - was charged earlier this year with racketeering and supporting violent groups.

The US Treasury Department said Bosnian authorities had found documents linking Mr Arnaout and Bin Laden in a raid on the offices of alleged affiliate charity Bosanska Idealna Furuta in March.

"In one handwritten letter, Bin Laden indicates that Arnaout is authorised to sign on Bin Laden's behalf," the department statement said.

"Various documents also established that Arnaout worked with others, including members of al-Qaeda, to purchase rockets, mortars, rifles, and offensive and defensive bombs, and to distribute them to various mujahideen camps, including camps run by al-Qaeda."

The department said it would ask the United Nations to add the charity to its list of groups whose assets all UN members must block.

Bombings

"UN designation of these financiers of terror will cut off their access to the global financial system and strip them of their ability to fund evil," Treasury Secretary Paul O'Neill said.

Arnaout is alleged to have been authorised to sign on Bin Laden's behalf

At midnight on Monday the UK Chancellor, Gordon Brown, ordered financial institutions to cut off funds to BIF, on "strong evidence" of links with al-Qaeda.

This included alleged attempts by al-Qaeda to obtain uranium for the purpose of building a nuclear weapon, a Treasury spokesman said.

The evidence also includes personal contacts between senior BIF officials and al-Qaeda operatives involved in the 1998 bombings of two US embassies in Africa, the spokesman added.

'Humanitarian'

On its website, BIF describes itself as "a humanitarian organisation dedicated to helping those afflicted by wars and natural disasters".

The Illinois-based organisation, which was set up in 1992, says it has aid programmes in Afghanistan, Azerbaijan, Bosnia, China, Pakistan, Tajikistan, and the Russian Federation states of Ingushetia and Dagestan.

In its accounts for 2000-2001, BIF claims to have spent $3,365,457 on aid projects and running expenses.