KARACHI, Pakistan - Police arrested a British-born Islamic militant yesterday they say masterminded the kidnapping of Wall Street Journal reporter Daniel Pearl - the biggest break yet in the quest to free him. An official close to the investigation said the suspect told police Pearl is alive.

Associated Press Police escort two men to the High Court yesterday in Karachi, Pakistan. Three men were accused of sending e-mail that announced the abduction of Wall Street Journal reporter Daniel Pearl. They will appear before a special anti-terrorism court that will decide whether police have enough evidence to continue to detain the suspects.

Ahmad Omar Saeed Sheikh, 27, was arrested yesterday afternoon in the eastern city of Lahore, according to Tasneem Noorani, a senior official of Pakistan's Interior Ministry. Saeed was expected to be transferred to Karachi for further questioning.

Following the arrest, police fanned out across this city of 14 million people, raiding homes of suspected Islamic extremists and searching settlements along the bleak and thinly populated Pakistani coast. Police cautioned that rescuing Pearl could still take time.

Saeed "is one who is highly educated and one who I would feel is a hard nut to crack," Karachi Police Chief Kamal Shah said. "I don't think it would be very easy to break him straight away. It would take time I feel before we get all the details about Daniel from his interrogation."

Saeed's capture followed an intensive, nationwide manhunt and was announced ahead of Pakistani President Pervez Musharraf's meeting today with President Bush in Washington. Musharraf is expected to seek U.S. economic and political support to help combat Muslim extremism in this predominantly Islamic country of 147 million people.

The Pearl kidnapping has been an embarrassment for Musharraf, who's been trying to dispel Pakistan's image as a hotbed of Islamic fundamentalism. Saeed's arrest is a boost for the Pakistani leader as he meets Bush.

Pearl, 38, the Journal's South Asia bureau chief, disappeared Jan. 23 on his way to meet with Islamic extremist contacts. He was believed to be working on a story about links between Pakistani militants and Richard C. Reid, the man accused of trying to detonate explosives hidden in his sneakers on a Paris-to-Miami flight in December.

Jamil Yousuf, head of a citizen-police liaison committee involved in the investigation, said the bearded, bespectacled Saeed told police that threats to kill Pearl were not carried out. "He's alive. He's OK," Yousuf quoted Saeed as saying of Pearl.

Yousuf said the key break came Monday night with the arrest of a suspect in the capital of Islamabad who gave crucial information. Yousuf did not elaborate.

Several more arrests were reported in Karachi, Rawalpindi and other major cities yesterday.

In Washington, White House spokesman Ari Fleischer said he could not confirm any details about Saeed's arrest or Pearl's reported condition. However, he said that cooperation by Pakistani authorities "has been very strong and very helpful" in the Pearl case.

Saeed was arrested in India in 1994 in connection with the kidnapping of three British backpackers in Kashmir. The kidnappers demanded the release of Islamic militants fighting to end Indian rule in the contested Himalayan region. Saeed was shot and wounded by police and the hostages were freed unharmed.

He spent the next five years in jail - although never brought to trial - and was freed in December 1999 after gunmen hijacked an Indian Airlines jet to Kandahar, Afghanistan, and demanded the release of Saeed and other figures.

A team of police officers from the southern province of Sindh had been in Lahore searching for Saeed for the last few days, the government-run news agency Associated Press of Pakistan reported yesterday.

Steve Goldstein, a vice president and spokesman for Dow Jones, the Wall Street Journal's parent company, declined to comment on whether the arrest revealed new information about Pearl's abduction.

"We continue to remain hopeful," Goldstein said in a telephone interview.

Police identified Saeed as the prime suspect in the case after arresting three men suspected of sending e-mails that announced Pearl's kidnapping.

One of the three men who was found to have the e-mails on his laptop computer told investigators that he got them from Saeed, police said. The other two said they had met Saeed in Afghanistan, police said.

The three suspected e-mailers were formally charged with kidnapping yesterday and ordered jailed for two more weeks by a special anti-terrorism court in Karachi.

Those suspects were brought to Sindh province's High Court in an armored personnel carrier surrounded by 20 machine-gun toting policemen wearing helmets and bulletproof vests. They were chained together at the waist, their heads and faces covered by shawls and bath towels. They were led into a second-story courtroom but presiding Judge Shabir Ahmed decided to hear their case in his chambers.

The trio had been due in court Monday but proceedings were delayed after officials decided that an anti-terrorism judge, not a civil one, should hear the case.

Four days after Pearl disappeared, an e-mail sent to Pakistani and international media showed photos of him in captivity and demanded that the United States repatriate Pakistanis captured in Afghanistan and now detained at the U.S. naval base in Guantanamo Bay, Cuba.

A second e-mail sent Jan. 30 said Pearl would be killed in 24 hours. That was the last known message from his captors.

Pearl's French wife, Mariane, is pregnant with the couple's first child.

Saeed, a first-generation Briton, is the son of a Pakistani-born clothing merchant who lives in a London suburb. Saeed attended expensive private schools where classmates and teachers regarded him as a devoted student.

On summer break from university at age 20, Saeed went to Bosnia to work with a charity. British press reports say he is believed to have developed ties there to militant Islamic groups that recruited him to fight for the secession of Indian-ruled Kashmir.

Saeed is believed to have links to Jaish-e-Mohammed, a radical group banned last month by President Musharraf.