Bin Laden's deputy said to be surrounded by Pakistani forces

By ANDREW BUNCOMBE in Washington and JAN MCGIRK

1.00pm - Osama bin Laden's deputy was today said to have been surrounded by Pakistani forces engaged in a pitched battle with al-Qaeda fighters close to the Afghan border.

The reports - if true - would represent a huge victory for the Bush administration.

Pakistani officials said their forces had cornered Ayman al-Zawahri in South Waziristan in an operation involving thousands of troops, artillery and helicopter gunships. It is unclear whether US Special Forces have been involved in the operation though publicly this is denied.

"We have been receiving intelligence and information from our agents who are working in the tribal areas that al-Zawahri could be among the people hiding there," one military official told the Associated Press.

"All of our efforts are to capture him."

The Pakistan President Pervez Musharraf said that having spoken to his military commander in charge of the operation he believed his forces had cornered a "high value" al-Qaeda target though he would not specify who that may be.

Sources have said there is no suggestion that Mr bin Laden is surrounded.

"[Judging by] the resistance that is being offered by the people there, we feel that there may be a high value target," Mr Musharraf told CNN.

"They are giving fierce resistance, so [the commander] is reasonably sure there is a high-value target there."

In Washington a US counter-terrorism official said: "It would appear that the Pakistanis have surrounded a very senior al-Qaeda figure, but at this point we are not certain who it is."

Reports say that Pakistani troops have moved into three South Waziristan towns - Azam Warsak, Shin Warsak and Kaloosha - firing artillery and using helicopter gunships against entrenched positions in an operation that began several days ago.

At least 41 people - including 15 soldiers and 26 suspected militants - have been killed so far.

One source inside Waziristan said thousands of fierce clansmen - supplemented by Chechen and Uzbek fighter - have resisted with rockets and assault rifles.

The Pakistani operation comes as the US is preparing for an imminent spring offensive to try and capture bin Laden.

Reports suggest that a deal has been done whereby American troops will be allowed to operate inside Pakistan territory - something that is extremely controversial amongst Pakistanis.

Mr Musharraf's ability to assist the US has been at least partly hampered by "pushtunwali", the tribal tradition of providing refuge to strangers and defending such guests to the death.

It is understood that within the last few days the Pakistani leader travelled to the border region to speak with tribal leaders and urge them to give up any al-Qaeda fighters who may be there.

The capture of Egyptian -born Dr Zawahri, aged in his early 50s and considered a close friend and mentor to Mr bin Laden, would be a huge coup for America and for the Bush administration.

In the aftermath of the attacks of September 11, 2001, Dr Zawahiri regularly taunted America with threats of further attacks. Recently he has been calling for assassination attempts against Mr Musharraf. Several attacks were carried out, though the Pakistani leader escaped unhurt.

Mr Zawahri, an Islamic radical who founded Egyptian Islamic Jihad, is believed to have joined forces with Mr bin Laden in 1992. The year before he published "The Bitter Harvest," a condemnation of the moderate Muslim Brotherhood and justification for jihad.

Washington sought to further cement its relationship with Pakistan yesterday by announcing it would award it a special status that would make it easier for the country to purchase American arms.

The new designation - that will place Pakistan alongside such countries as Australia, New Zealand and South Korea - will speed Islamabad's efforts to finalise a major arms deal with Washington.

Since the attacks in New York and Washington the Bush administration has sought to publicly present Mr Musharraf, an unelected military dictator, as a solid ally in President Bush efforts to take on terrorism.

Privately, many have questioned Mr Musharraf's commitment to helping root out the remnants of the Taleban regime and al-Qaeda fighters.

"We'll designate Pakistan as a major non-NATO ally for purposes of our future military-to-military relations," Mr Powell said at a press conference in the Pakistani capital, Islamabad.