Pearl, 38, was kidnapped while researching an article on Islamic militants. Khalid Sheikh Mohammed, the al-Qaida operative who has said he planned the Sept. 11 attack, also took responsibility for beheading Pearl. He remains in U.S. custody at the Guantanamo Bay detention camp in Cuba but has not been charged in Pearl’s death.

THE FAMILY of slain US journalist Daniel Pearl have welcomed the arrest in Pakistan of a former leader of a banned militant outfit allegedly involved in his 2002 murder.

Qari Abdul Hayee, popularly known as Asadullah and from Karachi's eastern Gulshan-e-Iqbal neighborhood, was detained in a raid on his hideout on Sunday, according to a spokesman for Pakistan's Rangers paramilitary force.

Ruth and Judea Pearl, who live in the Los Angeles area, hailed the news, in a statement issued through the New York-based Daniel Pearl Foundation.

"We are gratified with this latest arrest and hope that justice will be served in a timely manner on all those who were involved in the abduction and murder of our son, Danny," they said.

Pearl, 38, was the South Asia bureau chief for The Wall Street Journal when he was abducted in Karachi on January 23, 2002, while researching a story about Islamist militants.

A graphic video showing his decapitation was delivered to the US consulate in the city nearly a month later.