Three arrested in Times Square bomb probe

NEW YORK/BOSTON (Reuters) - Investigators arrested three people linked to the suspect in the failed Times Square bombing during raids on Thursday in suburbs of New York, Boston and Philadelphia, but officials said there was no new threat.

The three arrested may have provided money to the accused bomber Faisal Shahzad, U.S. Attorney General Eric Holder said.

The Boston-area searches occurred at a house in Watertown, where two people were known to have been taken into custody, and at a gasoline station in affluent Brookline.

Federal agents could be seen carrying boxes, envelopes and a crowbar out of the multifamily building in Watertown, a working-class town with a large Middle-Eastern community.

Massachusetts authorities said the people had been under surveillance for some time but did not specify how long.

"These are people who are connected to Mr. Shahzad, we're still trying to determine exactly what the nature of that connection was," Holder told reporters in Washington.

"There's at least a basis to believe that one of the things that they did was provide him with funds," he said, calling the arrests a significant step.

He said investigators were looking into whether those arrested knew what the money would be used for. "That's one of the things we're going to be trying to determine," he said.

A law enforcement source said the two people arrested near Boston were Pakistani.

The third arrest occurred in South Portland, Maine, according to local media.

Portland, Maine, was the site where two accused September 11 attackers, one of them suspected mastermind Mohammed Atta, left to fly to Boston, where they hijacked one of the jetliners that crashed into the World Trade Center.

The U.S. Attorney's Office in New York and the U.S. Immigration and Customs Enforcement (ICE) in Washington said earlier that the three people were taken into custody for alleged immigration-related violations.

The New York searches occurred in the towns of Shirley and Centereach on suburban Long Island, while the searches in New Jersey took place in Cherry Hill and in Camden, not far from Philadelphia. The FBI said there were no arrests in New York or New Jersey.

NO KNOWN THREAT

Also on Thursday, President Barack Obama visited New York Police Department headquarters to thank officers involved in the Times Square case.

The searches follow the arrest of Pakistani-American Faisal Shahzad, who was detained aboard a Dubai-bound jetliner two days after the car containing a crude bomb was found parked on May 1 in Times Square.

He has been charged with attempting to use a weapon of mass destruction and trying to kill and maim people.

Shahzad has admitted to the failed plot and to receiving bomb-making training in a Taliban and al Qaeda stronghold in Pakistan, prosecutors said, but he claims to have acted alone.

Holder said the searches were "the product of evidence that has been gathered in the investigation since the attempted Times Square bombing and do not relate to any known immediate threat to the public or active plot against the United States."

The Pakistani Taliban claimed responsibility for the failed bombing attempt. If proven, it would be the group's first act in the United States.

"We now believe that the Pakistan Taliban was responsible for the attempted attack," Holder said.

Investigators are also looking at possible links to the Kashmiri Islamist group.

In Washington, U.S. Secretary of State Hillary Clinton said that despite its recent improved efforts, Pakistan must do more to fight against extremists on its soil.

"We think that there is more that has to be done and we do fear the consequences of a successful attack that can be traced back to Pakistan because we value a more comprehensive relationship," she said at the U.S. Institute of Peace.

The Al Jazeera news agency, citing a tape provided by Taliban Pakistan, reported a statement from Taliban spokesman Azam Tariq as saying: "God willing, one of those days, a car like this will explode in America.

"And America will not be the only target but also all the countries which are allied with it. America and all its allies will burn," the statement said.

(Additional reporting by Jeremy Pelofsky and Sue Pleming in Washington, Ros Krasny in Boston and Ross Colvin, Daniel Trotta, Michelle Nichols and Christine Kearney in New York; Editing by Philip Barbara)