Tholut, 49, is suspected of helping set up a militant training camp in the province of Aceh and allegedly recruiting militants and raising funds for terrorist activities.

Tholut, also known as Mostofa, Pranata Yuda and Imron Baehaqi, reportedly gave little resistance when Indonesia's anti-terror unit Densus 88 made the arrest in the town of Kudus, central Java province. "We cornered him in Kudus at 8 a.m.," National Police spokesman Insp. Gen. Iskandar Hasan said.

Tholut is believed linked to the Jemaah Islamiah group that allegedly has ties with al-Qaida. JI, whose goals at one time included the formation of a single Islamic south Asian state, continues to be a major security concern for several other regional countries, notably Malaysia and Singapore and parts of the southern Philippines and southern Thailand.

In September, Malaysia repatriated Singapore's most wanted fugitive, Mas Selamat bin Kastari, 49, who is believed to be the head of the Singapore cell of Jemaah Islamiah. Kastari is suspected of masterminding a plot to hijack a plane and crash it into Singapore's airport.

JI also was designated a foreign terrorist organization by the United States in 2002.

JI has demonstrated a strategy of deadly attacks on locations popular with many foreign nationals, such as Indonesia's worst terrorist attack, the 2002 bombing of Indonesia's Bali resort nightclubs that left more than 200 dead, including 88 vacationing Australians.

The arrest of Tholut is a boost to the police's confidence in maintaining surveillance on suspected terrorists, even after their release from prison. In 2004, Tholut was sentenced to be jailed for seven years for the bombing of a shopping center in Jakarta but was released in 2007 for good behavior.

Security authorities had been trailing him for the past month, Hasan said.

As well as the anti-terror force Densus 88, Indonesia's national police also want to question Tholut. "Abu Tholut was deeply involved in terrorist training in Aceh and armed robberies in north Sumatra province," national police spokesman Boy Rafli Amar said.

Police want to question him in relation to a bank robbery in the city of Medan earlier this year, which they said was for money to finance militant groups.

Tholut's arrest follows what police said was another blow against JI. In August, Indonesian police picked up radical Muslim cleric Abu Bakar Bashir, who awaits trial in Jakarta on terrorism charges. He was arrested at his home in Ciamis, in the western area of the southern island Java. He denies the charges and maintains that his arrest was on the orders of the United States.

Bashir, 71, is suspected of helping set up a militant Islamic training camp in Aceh, on the northern tip of Sumatra Island. He also served more than two years in jail before being cleared of involvement with JI.

In 2008 he claimed that the first bomb set off in Bali was very small. "At most it shattered glass and didn't wound people, or at most wounded them a little," he said. The main explosion was what he called "a micro-nuclear bomb, not a regular bomb ... The bomb was made by the CIA, it could be no one else."

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