An Algerian charged with bringing a large quantity of bomb-making materials into the US from Canada may be connected with a theft ring that funnelled funds to terrorist groups, Canadian authorities say.

US officials said there were indications that the man, Ahmed Ressam had links to the Saudi exile Osama bin Laden, who the US holds responsible for last year's bombing of two American embassies in Africa.

The US Government placed all points of entry into the country on high alert following the arrest of Mr Ressam.

Montreal Police spokesman Andre Poirier said he had been jailed for some weeks in 1998 for stealing laptop computers and cellular telephones.

Mr Poirier also alleged a connection between the suspect and Said Atmani, who is believed to be the head of a Montreal crime ring allegedly engaged in similar criminal activity.

"We have reason to believe that the money that was gathered after selling those goods was distributed to some terrorism groups," Mr Poirier added.

A BBC correspondent in Washington says the fact that Mr Ressam allegedly had so much bomb-making equipment in his possession appears to have caught US law enforcement agencies by surprise, as they had expected any attacks to happen abroad.

The US National Security adviser, Sandy Berger, said he was not aware of any specific threats against targets in the US, but an extra 150 customs officers have now been sent to reinforce border posts.

Mr Berger again urged Americans to be vigilant against potential terrorist attack anywhere in the world over the millennium holiday period.

Mr Ressam, who was detained on Tuesday after landing in Washington state on a ferry from British Columbia, had been turned down for refugee status in Canada because of suspected links with Algeria's radical Armed Islamic Group or GIA.

Police said Mr Ressam shared an apartment in Montreal last year with Karim Said Atmani, who was extradited to France last week on charges stemming from bombings in 1995 and 1996.

Explosives

Mr Ressam is wanted in Canada for having violated immigration rules as well as for two thefts and a break-in. He was arrested once for theft in Montreal in 1998.

He went into hiding after his application for refugee status was rejected.

US authorities said they found two 22-ounce (660ml) plastic jars containing nitro-glycerine in the rented car driven by Mr Ressam.

He was charged with trying to import 54kg (119 pounds) of explosives and making false declarations to US border agents.

Ticket for London

Police in the US say Mr Ressam had reserved a motel room in Seattle for 14 December, the day he arrived, and was carrying tickets that would have taken him the next day to London via Chicago and New York.

The Seattle motel was not far from the Space Needle tourist attraction, which is expected to be the focus of a large New Year's Eve celebration.

A week ago, the United States warned its citizens that several terror groups were believed to be planning attacks on crowded places during celebrations marking the New Year