Ali Charaf Damache arrested: Algerian-born terror suspect who recruited 'Jihad Jane' held in Spain

Colleen LaRose, who used the online name Jihad Jane, was convicted in 2011 of agreeing to kill Swedish artist Lars Vilks

Ali Charaf Damache arrives at the courthouse in Waterford Ireland. An Algerian-Irish man accused of recruiting an American woman who called herself "Jihad Jane" and plotting to kill a Swedish artist has been arrested in Spain, (AP)

An Algerian-born terror suspect, wanted in the US on two counts of conspiring to develop a European terror cell and aiding Pakistan-based militants, has been arrested in Spain.

Ali Charaf Damache, who holds Irish citizenship, was accused of recruiting American women Colleen LaRose and Jamie Paulin-Ramirez via jihadist websites by the US Justice Department.

"We became aware that this person was in Barcelona earlier this week," said Jordi Jané, the regional interior minister for Catalonia told a press conference.

Police were alerted to his presence in Barcelona thanks to a telephone tip-off to the emergency 112 number, Spanish media reported.

American investigators believe Damache recruited Colleen LaRose, who used the online name “Jihad Jane”.

She was convicted in 2011 of agreeing to kill Swedish artist Lars Vilks - whose drawings depicting the prophet Muhammad as a dog offended Muslims - and sentenced last year to 10 years in prison.

Her lawyer claimed she became obsessed with the cause after meeting a Muslim man on holiday in the Dutch capital, Amsterdam. After returning to her home in rural Pennsylvania, she began reading Islamic websites, learning the basics from a mentor in Turkey, before converting via instant messenger.

With her blond hair, blue eyes and US passport, the 51-year-old forever changed the face of terror in the United States, prosecutors said.

Damache married Jamie Paulin-Ramirez, on the first day she arrived in Ireland from her hometown of Leadville, Colorado, accompanied by her 6-year-old son in 2009.

The 35-year-old is serving an 8-year sentence after pleading guilty in 2014 to providing material support to terrorists. After she was arrested in Ireland with her husband in March 2010, she agreed to return to the United States, and pled guilty in 2014 to providing material support to terrorists.

After his 2010 arrest Damache pleaded guilty to an unrelated charge of making a telephoned death threat to a Michigan-based Muslim critic of Jihadists.

He was sentenced to three years in February 2013 but freed because he had already spent three years behind bars fighting the charge and awaiting a verdict. On the very same day, Irish police handed him an extradition warrant.

US and Irish authorities at the time said they expected swift extradition, but Damache successfully appealed to Ireland's Supreme Court and was allowed to walk free after Justice Aileen Donnelly delivered a 333-page judgment that criticized Irish prosecutors and potentially cruel US prison conditions.

His path from Ireland to Spain was unclear and US authorities have not said whether they will launch extradition proceedings from there.