Ahdal is believed to have fought in Bosnia and Chechnya
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A Yemeni man suspected of being a local leader for al-Qaeda has been arrested, the official news agency Saba says.
Mohammad Hamdi al-Ahdal tops Yemen's most wanted list - and was named by the authorities as one of two top suspects belonging to Osama Bin Laden's network.
He reportedly surrendered on Tuesday after police surrounded a house in the capital Sanaa where he had been hiding.
Yemen has been working closely with the US to crackdown on suspected militants following attacks in the country.
A US defence official said Mr Ahdal was considered an operational-level planner for al-Qaeda, but was not a strategic operator or member of the network's inner circle.
A bomb attack severely damaged the USS Cole in 2000
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But the official said his capture was significant and that he was an important operator in terms of Yemen and the Arabian peninsula.
A Yemeni interior ministry statement said security officials "were able to arrest this morning Mohammad Hamdi al-Ahdal, alias Abu Issam al-Maki, one of the top al-Qaeda leaders in Yemen".
Security officials had been watching him for several months before surrounding his house, the statement added.
There have been a number of attacks on Western targets in Yemen.
The warship USS Cole was bombed in Yemeni waters in 2000, killing 17 US sailors, and last year a French tanker was attacked off the coast of Yemen.
According to Yemeni security reports published in the local media last year, Ahdal played a key role in planning both attacks.
He reportedly ranked second to Qaed Senyan al-Harthi, who was among six suspects killed last November by a rocket fired from an unmanned CIA-operated Predator drone.