Anwar al-Awlaki has also been linked to the Fort Hood shootings
The alleged US plane bomber met radical Muslim cleric Anwar al-Awlaki in Yemen, after being recruited in London, a senior Yemeni official has said.
Last week US security official John Brennan said there were "indications" of direct contact between the two men.
Mr Awlaki was linked to an attack by a US Army major on the Fort Hood base in November, in which 13 people died.
Yemen's deputy prime minister also said bomb suspect Umar Farouk Abdulmutallab used explosives from Nigeria not Yemen.
Mr Abdulmutallab was indicted by a US grand jury on six counts on Wednesday.
Born 1971 in New Mexico
Sermons in San Diego, California, attended by two of 9/11 hijackers
Endorsed violence as religious duty
Moved to Yemen in 2004 to live in ancestral home village
Jailed in 2006 for alleged plot to kidnap US military attache
Advised Fort Hood suspect Maj Nidal Malik Hasan by e-mail
Charges against him include attempted murder of the 290 people aboard the plane and attempted use of a weapon of mass destruction.
Mr Abdulmutallab allegedly tried to detonate a bomb on Northwest flight 253 from Amsterdam to Detroit, but the plane landed safely after crew and passengers overpowered him.
In a separate development, Yemeni Deputy Prime Minister Rashad al-Alimi said that five Germans including three children and a Briton kidnapped in Yemen six months ago were still alive.
He said northern Shia rebels were co-operating with al-Qaeda over the kidnap.
'Not just a cleric'
Mr Alimi told journalists that Mr Abdulmutallab "joined al-Qaeda in London".
The suspected bomber studied at University College London (UCL) from September 2005 to June 2008 and was president of its Islamic society in 2006-07.
Umar Farouk Abdulmutallab has been in custody since 25 December
But UCL has said there is no evidence to suggest Mr Abdulmutallab was radicalised while he was there, and UK officials responding to the Yemeni statement said they still believed his recruitment occurred in Yemen in the months before the attack.
Mr Alimi said the suspect met Mr Awlaki in the cleric's ancestral home province of Shabwa.
Mr Awlaki, a radical American Muslim cleric of Yemeni descent, has been linked to other attacks, including that carried out by Maj Nidal Malik Hasan of the US Army at the Fort Hood base in Texas in November.
"Mr Awlaki is a problem. He's clearly a part of al-Qaeda in [the] Arabian Peninsula," Mr Brennan, who is US deputy national security adviser, told CNN last week.
"He's not just a cleric. He is in fact trying to instigate terrorism."
Some reports say the cleric was killed just before the Christmas attack, in an airstrike on a suspected al-Qaeda base.
However, friends and relatives say he was not harmed in the raid.
The BBC's Jeremy Bowen in Sanaa says Yemen has been accused of soft-pedalling on al-Qaeda and is currently under pressure from its ally the US to produce results.
There have been a number of shootouts recently, but the authorities have as yet been unable to capture one of their prime targets, Mohammed al-Hanouk.
However, Mr Hanouk is a member of a prominent tribal family, our correspondent says, and this suggests that the government is prepared to push hard in directions it might be easier to leave alone.
'A certain shock'
Confirmation of the meeting between the alleged bomber and the cleric comes as the White House plans to publish a declassified account of the Christmas Day plot.
In an interview for USA Today newspaper, National Security Adviser Gen James Jones said people would feel "a certain shock" that clues about Mr Abdulmutallab's role were not acted on.
President Barack Obama "is legitimately and correctly alarmed that things that were available, bits of information that were available, patterns of behaviour that were available, were not acted on", he said.
Mr Obama is expected to address the nation about the incident later in the day and unveil new steps aimed at avoiding further terrorist attacks.