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A Kiwi seized in Pakistan on suspicion of connections to the Taleban and al Qaeda has no links to either group, according to the country's military intelligence.
Pakistani journalist Syed Fawad Ali Shah said military intelligence sources told him they were satisfied of Taylor's innocence and he was expected to be released shortly.
Taylor was arrested earlier this month while travelling in a van through the South Waziristan area.
Guards at a checkpoint picked him up among others in the van as it crossed into an area considered a Taleban stronghold.
Ali Shah said Taylor had been taken to Peshawar after his arrest, and from there to Islamabad, where he had been questioned by military intelligence.
"He was not Taleban. He was a Christian but has become a Muslim. He didn't have any permission to go into the area - that area is a very dangerous area."
New Zealand's honorary consul in Pakistan went to Islamabad to see Taylor, but has so far been unsuccessful in gaining access.