Officers seized the man, who cannot be named for legal reasons, in Ramallah, in the West Bank, late on Saturday. Irish security sources claim he is a top Provisional who defected to the Real IRA, the renegade group responsible for the Omagh bombing in 1998 which is still waging a violent campaign for Irish unity.

Israel has imposed a news blackout, and a government source would only say that a suspect with foreign identity papers had been apprehended. It was unclear whether the papers were genuine.

No further details were given but the man is alleged to be a wealthy businessman.

An Irish police source said officers had lost track of the suspect about three years ago, but was thought to have entered Israel through Ben Gurion airport near Tel Aviv on a British passport three weeks ago.

"He was a top Provo bomb-maker about 10 years ago but went over to the Real IRA about 1997-98," said the source. "He seemed to have just disappeared off the face of the earth about three years ago and we haven't seen him since."

The Israeli secret services, alerted to the man's background by British intelligence, believe the suspect slipped into the West Bank shortly after his arrival in Israel and hooked up with Palestinian militants.

They fear he may have been training them in construction and use of various bombs, such as a vertical mortar, with a two-mile trajectory, developed by the Real IRA.

The allegations are similar to those against three suspected Provisional IRA members, currently on trial in Colombia accused of training Marxist Farc rebels. Their arrest contributed to the downfall of the power-sharing Stormont government last October when unionists decided they could not trust their republican coalition partners.

Irish security sources said the detained man was a protege of one of those detained in Colombia, Jim Monaghan, the alleged head of the Provisional IRA's engineering department.

When the Provos embraced the peace process, the suspect apparently joined the Real IRA, of which Dundalk man Michael McKevitt, currently on trial in Dublin for directing terrorism, is allegedly leader.

Kevin Fulton, a former army intelligence agent within the IRA, said the finer points of bombmaking technology were a closely guarded secret to which only a few trusted individuals would be party.

The Provisional IRA has a long history of links with international paramilitaries, including such groups as Islamic Jihad and Hizbullah. The latter trained Provos in southern Lebanon. This is the first sign of contact between Palestinian militants and dissident republicans, who may be selling their skills for much-needed funds.

theguardian.com/nireland

