TRIPOLI (Reuters) - A Libyan Islamist whose fabricated testimony about al Qaeda was used by the United States to justify its 2003 invasion of Iraq has killed himself in his Libyan jail cell, a Libyan newspaper reported on Monday.

Human rights groups in the West demanded an immediate investigation into the death of Ali Mohamed Abdelaziz al Fakhiri, 46, also known as Ibn Sheikh al-Libi and a key figure in U.S. intelligence reports on al Qaeda before the war.

“(Fakhiri) who is known as Ibn al Sheikh al-Libi, was found dead after he committed suicide,” Oed newspaper said on its website, adding that Libyan authorities were investigating the case.

Captured by U.S.-led forces in Pakistan in the weeks after the September 11, 2001 attacks, Fakhiri later made up a story about links between al Qaeda and Iraq to avoid torture while in the custody of a third country, according to a 2006 U.S. Senate Intelligence Committee report.

U.S. media have reported that Fakhiri provided the account to interrogators in Egypt, where he was sent by the United States in January 2002.

Egyptian officials were not immediately available for comment.

Fakhiri was later returned to U.S. custody and withdrew his accusations about ties between Iraq and al Qaeda in January 2004, the U.S. committee report said.

The committee found that in the run-up to the Iraq war the U.S. intelligence community based assessments about possible Iraqi training of al Qaeda largely on evidence from Fakhiri.

INVESTIGATION CALLS

Oed reported that Fakhiri was extradited by the United States to Libya in 2006, when Tripoli authorities sentenced him to life imprisonment.

The paper said he had been an inmate at Guantanamo Bay. A Pentagon spokesman said neither his name or alias appeared on the Pentagon’s list of detainees held there.

The paper said he had left Libya in 1986 to travel to Morocco, Mauritania and then to Saudi Arabia where he was recruited in 1990 to join Islamist militants in Afghanistan.

Fakhiri later became the head of a military camp in Afghanistan training Islamist militants from Arab countries. He was caught by U.S.-led forces as he was crossing the Afghan border into Pakistan.

The paper did not say which prison Fakhiri died in. But Human Right Watch researcher Heba Morayef told Reuters in London that she saw Fakhiri on April 27 during a visit to the Libyan capital’s main Abu Salim jail.

She said Fakhiri appeared for just two minutes in a prison courtyard. He look well, but was unwilling to speak to the Rights Watch team, she said. “Where were you when I was being tortured in American prisons?” she quoted him as saying.

She added: “We are asking for a prompt and transparent investigation into his death.”

In London, Reprieve, an organization of human rights lawyers said it was alarmed by the report of Fakhiri’s death.

“Reprieve demands the truth about the reported death of Ibn Sheikh al Libi, the ‘informer’ whose statements -- obtained by torture -- were used to justify the Iraq war,” it said in a statement.

The paper said former friends of Fakhiri cast doubt on his reported suicide, arguing that the former mosque preacher from the coastal Ajdabiya town knew suicide was prohibited by Islam.