An Al-Qaida umbrella group in Iraq denied in a statement posted yesterday on a militant website that US troops had captured the highest ranking Iraqi in the leadership of Al-Qaida in Iraq.

Last week, the US command announced the arrest of Khaled al-Mashhadani, describing him as someone who had served as the link between Al-Qaida's command in Iraq and Osama bin Laden's inner circle.

Al-Mashhadani, also known as Abu Shahid, was captured on July 4 in the northern Iraqi city of Mosul, the US military said. He is allegedly a close associate of Abu Ayub al-Masri, the Egyptian-born head of Al-Qaida in Iraq.

In a statement posted on an Islamic website commonly used by insurgents, the Islamic State of Iraq said yesterday that the arrest report was a "new lie" by US troops.

"Once and again, the crusader occupying army comes out with a new lie about killing or arresting a number of mujahideen leaders or soldiers in a desperate attempt to cover up the failure of the crusader's campaign against the Muslims' land," the statement said.

However, it gave no indication of al-Mashhadani's current whereabouts nor did it provide any proof that the Iraqi militant was not in captivity.

(China Daily via agencies July 25, 2007)