The arrest of Ahmad Omar Saeed Sheikh on Tuesday in the eastern city of Lahore came after Sheikh returned to a family member's home, where authorities who were monitoring his telephone calls lay in wait.
"We were on a stakeout Tuesday morning," said Javed Noor, deputy inspector general of police in Lahore. "We sat outside the home until Sheikh showed up. He was not surprised. He didn't put up a fight. He was not armed. He was very cool."
The arrest raised hopes that Pearl, 38, would be freed soon, three weeks after his disappearance in Karachi, the port city where he came to investigate alleged connections between an extremist Islamic group and accused "shoe bomber" Richard C. Reid.
It was not immediately clear, however, whether Sheikh gave investigators information about Pearl's whereabouts.
Soon after his arrest, investigators hustled Sheikh off to Karachi under heavy guard and appeared to be hurrying to resolve the kidnapping case that has added tension to U.S.-Pakistani relations. President Pervez Musharraf is in Washington for a meeting today with President Bush.
Aided by FBI agents, police from Punjab province, where Lahore is located, tracked down Sheikh by studying records of cell phone calls made by two Sheikh associates arrested in Islamabad, the capital, Noor said. The suspects, whose names have not been released, made numerous calls to the house where Sheikh was apprehended.
"The FBI provided great technical assistance in all this," said Javed Iqbal Cheema, director general of the crisis management division of the Interior Ministry. "It's too early to tell when Daniel will be recovered, but we have been told he is alive. And we hope it will be soon."
The arrest boosted hopes among U.S. officials, family members and colleagues who have weathered weeks of promises, predictions, speculation and hoaxes concerning Pearl's fate.
"Things are moving now," one American diplomat said Tuesday night. "We hadn't lost hope--nobody here had. But the arrest is a great break. The guy they got, he's the main one. We're hoping he'll lead us to Pearl."
The diplomat, who asked that his name not be used, said FBI agents had been working closely with their Pakistani counterparts over the last few days. He said he didn't know whether any American agents were in Lahore when Sheikh was apprehended.
"This is a very worthy breakthrough," said Syed Kamel Shah, the police inspector general for Sindh province, where Karachi is located. "The results will be, and we hope soon, to see Daniel Pearl."
Sheikh, a 27-year-old British citizen, has ties to Pakistani Islamic extremist groups as well as the Al Qaeda network. Indian intelligence officials suspect that he is behind an attack last month on the American Center in Calcutta and have said they believe that he may have wired money to Mohamed Atta, the suspected ringleader of the suicide hijackers who attacked the World Trade Center and the Pentagon.
Educated at elite British institutions, including the London School of Economics, Sheikh joined the Islamic "holy war" after a summer spent in Bosnia-Herzegovina aiding Muslim war victims.
Since Pearl's disappearance, Pakistani authorities have detained about a dozen people and raided homes in several provinces. They have also detained an unknown number of Sheikh's relatives in an acknowledged attempt to put pressure on him to surrender.
Three men have been charged as accomplices to the kidnapping after investigators discovered electronic evidence that they had sent two e-mail announcements of the abduction from a group dubbed the National Movement for the Restoration of Pakistani Sovereignty. One or more of those suspects told authorities they sent the messages at Sheikh's behest, according to investigators.
In angry anti-American tones, the hitherto unknown group vowed to kill Pearl and demanded, among other things, the release of Pakistanis detained during the U.S. war on Afghanistan and of the former Taliban ambassador to Pakistan.
The three e-mail suspects appeared at a hearing in Karachi under extremely tight security earlier Tuesday. Hooded, shackled and escorted by guards wearing protective vests, Fahad Naseem, Sheikh Adil and Salman Saquib stepped out of an armored personnel carrier into a phalanx of cameras. After a brief appearance, they were ordered held without bail for an additional 14 days.
Until he was named a top suspect last week, Sheikh had moved about Pakistan without apparent impediments from authorities despite his role in kidnapping foreign hikers in the Indian-controlled part of the disputed Himalayan region of Kashmir--for which he was imprisoned by Indian authorities in 1994. Five years later, he was freed as part of a deal with hijackers of an Indian Airlines jet.
Mohan reported from Karachi and Gettleman from Islamabad.