Federal authorities arrest 21-year-old Quazi Mohammad Rezwanul Ahsan Nafis who they say attempted to detonate a fake bomb supplied by the FBI

A man has been arrested in New York for allegedly trying to blow up the Federal Reserve with what he believed was a 1,000lb bomb but was in fact a fake device provided by federal agents.

The FBI said its sting operation culminated in the arrest of Quazi Mohammad Rezwanul Ahsan Nafis, 21, in a hotel room near the Fed as he tried in vain to detonate the inert device.

The agency said it had controlled the "entire operation to ensure the safety of the public and New Yorkers", adding that the public "was never at risk". But the FBI's admission that it ran the whole operation will inevitably attract accusations of entrapment.

According to the FBI, Nafis travelled to the US from Bangladesh in January with the intention of conducting a terrorist attack. Upon arrival he "actively sought out al-Qaida contacts within the US to assist in carrying out an attack", the FBI said.

In the course of his search he came across an undercover FBI agent posing as an al-Qaida facilitator. The agent supplied Nafis with 20 50lb bags of fake explosives, the FBI said, and drove to the Federal Reserve with Nafis on Wednesday morning.

During the journey to lower Manhattan the 21-year-old assembled what he thought was a 1,000lb bomb using the material supplied by the undercover agent. When the van arrived at the Federal Reserve, just a few blocks from the World Trade Center, Nafis and the agent left the vehicle and walked to a nearby hotel, where Nafis "repeatedly, but unsuccessfully, attempted to detonate the bomb", which had been assembled using "inert" explosives, the FBI said.

Nafis was arrested by agents from the Joint Terrorism Task Force at the scene.

"Quazi Mohammad Rezwanul Ahsan Nafis, 21, was arrested this morning in downtown Manhattan after he allegedly attempted to detonate what he believed to be a 1,000-pound bomb at the New York Federal Reserve Bank on Liberty Street in lower Manhattan's financial district," the FBI said in a statement.

"The defendant faces charges of attempting to use a weapon of mass destruction and attempting to provide material support to al-Qaida."

Nafis is said to have proposed several targets for the attack, including a "high-ranking US official" and the New York Stock Exchange before settling on the New York Federal Reserve. In a written statement he had professed a desire to "destroy America" and praised Osama bin Laden.

Nafis has been charged with attempting to use a weapon of mass destruction and attempting to provide material support to al-Qaida.

The Federal Reserve bank in New York is one of 12 locations around the country that, along with the Board of Governors in Washington, make up the Federal Reserve System that serves as the central bank of the United States.