Pakistani-American arrested over failed car bomb

NEW YORK/WASHINGTON (Reuters) - A Pakistani-American man has been arrested for driving a failed car bomb into New York's Times Square last Saturday as investigators continue to pursue leads, U.S. authorities said on Tuesday.

Faisal Shahzad, a naturalized U.S. citizen born in Pakistan, was arrested at about 11:45 p.m. on Monday (4:45 a.m. British time on Tuesday) at John F. Kennedy International Airport in New York as he attempted to board a flight to Dubai, local and federal officials said.

"The intent behind this terrorist act was to kill Americans," U.S. Attorney General Eric Holder told an early morning news conference.

Faisal will appear in Manhattan federal court later on Tuesday to face charges "for allegedly driving a car bomb into Times Square on the evening of May 1," according to a statement by U.S. Attorney Preet Bharara, FBI agent George Venizelos and New York City Police Commissioner Raymond Kelly.

Authorities were searching the 30-year-old Shahzad's home in Bridgeport, Connecticut, New York police said.

Shahzad is also believed to have bought the 1993 Nissan sport utility vehicle used to carry the crude bomb made of fuel and fireworks into Times Square as the theatre and shopping district was packed with people on a warm Saturday evening.

"This investigation is ongoing, as are our attempts to gather useful intelligence, and we continue to pursue a number of leads," Holder said, adding that "it's important that the American people remain vigilant."

For New Yorkers who bore the brunt of the September 11 attacks by al Qaeda militants in 2001, the scare was a reminder that their city of 8 million people remained under constant threat.

Law enforcement sources told Reuters that Saturday's attempted attack may have involved more than one person and could have international ties. The New York Times said Shahzad had recently returned from a trip to Pakistan.

'THEY WANT TO ATTACK'

The Taliban in Pakistan said on Sunday it planted the bomb to avenge the killing in April of al Qaeda's two top leaders in Iraq as well as U.S. interference in Muslim countries.

Some officials voiced scepticism about the claim. But former CIA analyst Bruce Riedel, who last year oversaw an Obama administration strategy review on Afghanistan and Pakistan, cautioned against dismissing a possible role by the Taliban.

"They have said they want to attack inside the United States," he said before the arrest was announced, adding there was "a very serious possibility" the incident involved "some Pakistani-American who has never built a car bomb before in his life but who is being coached either by phone or Internet."

Pakistan is a key ally to the United States and other NATO countries fighting the Taliban in neighbouring Afghanistan but is also seen as a training ground for Islamist militants.

The failed bombing was the second significant plot in nine months targeting New York City. An Afghan immigrant, Najibullah Zazi, has pleaded guilty to plotting a suicide bombing campaign on Manhattan's subway system last September.

U.S. authorities disrupted that plot before Zazi and his accused accomplices were able to carry it out. Another Afghan-born man has pleaded guilty for his role in the plot.

"As we move forward, we will focus on not just holding those responsible for it (the failed bombing) accountable, but also on obtaining any intelligence about terrorist organizations overseas," Holder said.

The hunt for clues and suspects is being overseen by the Joint Terrorism Task Force, led by the U.S. Justice Department, as investigators pore over surveillance camera footage, the Nissan Pathfinder and the bomb parts.

Street vendors selling T-shirts and handbags alerted police on Saturday evening to the smoking and sparking vehicle that was parked with its engine running and hazard lights on near a Broadway theatre where Disney's "The Lion King" is performed.

The Pathfinder, with a rear licence plate taken from a car now in a repair shop in Connecticut, was rigged with propane gas cylinders, gasoline cans, fertilizer, fireworks and timing devices.

The registered owner of the vehicle told police he sold it three weeks ago without any paperwork to a 29- or 30-year-old man described as Hispanic or Middle Eastern, law enforcement sources told Reuters.

New York Mayor Michael Bloomberg has described the failed car bombing as an "amateurish" job but authorities said the device could have created a deadly fireball had it detonated.

Bloomberg early on Tuesday thanked law enforcement authorities, saying that their "focussed and swift efforts led to this arrest after only 48 hours of around-the-clock investigation. I hope their impressive work serves as a lesson to anyone who would do us harm."

Shahzad's arrest came at one of the New York airports where authorities had beefed up security in the wake of the failed attack, concerned that whoever was responsible for the incident would try to escape the country.

The incident had little impact on Monday on a broadly stronger stock market and Treasury bonds stayed lower in a similarly muted reaction, with attention focussed on encouraging economic data and reduced anxiety over Greece.

(Additional reporting by Dan Trotta in New York; Jeff Mason, JoAnne Allen and Will Dunham in Washington; Editing by John O'Callaghan and Will Dunham)