US believes Bin Laden still alive but in hiding

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The American government is increasingly convinced that Osama bin Laden is alive and possibly hiding in the rugged border region between Afghanistan and Pakistan. But it believes that the leader of al-Qa'ida is in no position to mount further terrorist operations.

Speaking almost three months after the collapse of the Taliban regime on NBC News yesterday, Donald Rumsfeld, the US Defence Secretary, confessed that neither a $25m (£17.5m) reward nor the most intense and most technologically advanced manhunt in history had ascertained the whereabouts of Mr bin Laden.

"I've seen no hard evidence he's alive," Mr Rumsfeld said. He said that his likeliest lair was Afghanistan but that Kashmir was also a possibility – though India denied yesterday that Mr bin Laden was in the part of the province administered by Delhi.

The Defence Secretary asserted, however, that while al-Q'aida cells remained dangerous, Mr bin Laden himself was not a great or direct danger, for all America's frustration at not catching him. "Is he raising money, is he leading operations?" Mr Rumsfeld said. "The answer is no. If he's alive, he's having a very busy time hiding."

The Pentagon estimates that of an original al-Q'aida high command of about 20, six are known to have been killed.

* Pakistani police are hunting an Arab man who may be connected to al-Qa'ida and the murder of the American reporter, Daniel Pearl, a police source said. It is the first time that al-Qa'ida has been linked to the killing. The British-born mastermind behind the kidnapping of Mr Pearl, Ahmed Omar Saeed, 28, was due to appear in court in Karachi today.