Pakistani authorities have arrested the alleged mastermind of a deadly bombing near the US Consulate in Karachi two years ago, but another key member of his network is still on the run, a senior official said today.

An Islamic militant wanted in connection with the abduction and beheading of American journalist Daniel Pearl was killed in a police raid in Karachi today.

US Federal agents have served search warrants at two American-based Islamic charities over their efforts to identify groups providing support to terrorists.