Al-Qaeda Financier Held.

US and Iraqi forces on Oct. 2 arrested a financier for al-Qaeda who had received $100m from donors outside Iraq to fund Neo-Salafi operations. US military officials have long attributed al-Qaeda's expansion in Iraq to its access to external finance, but rarely release figures which give insight into the scale of the operation they say they are facing.

A US military statement said the $100m had been received over the summer from "terrorist supporters who cross the Iraq border illegally or fly into Iraq from Italy, Syria and Egypt". It did not indicate how the total was arrived at or whether the money had been found in the Oct. 2 raid near Baghdad which saw the unnamed man arrested. But US officers had previously said that captured Neo-Salafi insurgents will boast about attacks and exaggerate their importance.

The statement said the man had distributed $50,000 a month - a figure more in line with past reports of al-Qaeda's financial activities - and employed 40-50 "extremists" to plant IEDs and paid them $3,000 for each operation. It also said he was linked to the purchase of explosives used in the Feb. 22, 2006, Neo-Salafi attack on the Golden Shrine at Samarra' - a holy Shi'ite site - which escalated the country's sectarian violence.

No details of the man's nationality were released but, according to the statement, the financier used a leather merchant business as a front to smuggle in weapons and explosives, and had shops in the Anbar town of Falluja, in Syria and in Jordan.

Little precise information has been made public about al-Qaeda's sources of funding, but Iraqi politicians claim it draws from donors in Arab Gulf Co-operation Council (GCC) countries and the hundreds of millions of dollars smuggled abroad by Saddam's Sunni/Ba'thist dictatorship just before the March 2003 US-led invasion.

Powerful IEDs, said to be made in Iran, are not given only to Shi'ite militias. They are being used by Neo-Salafi insurgents allegedly backed by the 'Alawite/Ba'thist regime of Syria. IEDs on Oct. 4 killed Abbas al-Khafaji - the Shi'ite mayor of Iskandariya, a mixed Sunni-Shi'ite town just south of Baghdad which has been part of a "triangle of death" - and wounded Shaikh Mu'awiya Jebara, a Sunni tribal leader working with US forces.

Khafaji, a member of the powerful Supreme Islamic Iraqi Council (SIIC) created in Iran in the early 1980s, was killed along with four of his guards in an attack on his convoy. SIIC is an ally of the US while its leader, religious Shi'ite Shaikh Abdul-Aziz al-Hakim, is being treated for cancer in Iran. Shi'ite VP Adel Abdul-Mahdi is a top leader in SIIC and, like Hakim, was earlier this year received by President Bush at the White House.

In the Sunni Province of Salahuddin, north of Baghdad where Saddam was born, Shaikh Jebara was wounded as an IED exploded near his motorcade. The bomb killed three of his guards. Al-Qaeda now is targeting tribal leaders in Salahuddin because of their co-operation with the US against Neo-Salafi militants in that province.

A Neo-Salafi suicide car bomber on Oct. 5 killed at least 15 people and injured 30 at a market in Tal 'Afar, a mainly Turkman town near the Syrian border where al-Qaeda is trying to re-establish a base.