Powell claims European terror network is run by al-Qa'ida team based in Iraq

Colin Powell sought to draw links yesterday between a pan-European al-Qa'ida terror network, directed by a one-legged lieutenant of Osama bin Laden, and the Iraqi regime.

The US Secretary of State insisted events such as the discovery of the poisin ricin in Britain and the murder of DC Stephen Oake carried the Iraqi regime's fingerprints. At the heart of the link is the figure of Abu Musab al-Zarqawi, 34, an associate of Bin Laden accused of operating a poisons training camp in Afghanistan before fleeing to Iraq after the Allied offensive to continue his work.

Delivering just the words that hawks in Washington had been waiting for, General Powell said that Zarqawi, a Jordanian Palestinian who is already under a death sentence in his native country for plotting terror attacks, and his group were operating in Baghdad and the north-east of Iraq.

From there, General Powell said, he had sent dozens of operatives into Europe and was looking to conduct a campaign of bombings and poisonings across the continent. "The network is teaching its operatives how to produce ricin and other poisons ... Zarqawi and his network have plotted terrorist actions against countries including France, Britain, Spain and Italy."

Zarqawi had initially been restricted to northern Kurdish areas of Iraq, outside the control of Saddam Hussein's regime but under the control of a fundamentalist group, Ansar al-Islam, which had been infiltrated by a senior Iraqi agent who invited al-Qa'ida to the area, General Powell said.

But last May, the veteran of the Afghan war who was injured in an American air raid on the country last year, spent two months in Baghdad for medical treatment, as a result of which he lost a leg. While he recuperated in the Iraqi capital, some 24 known extremists set up a base of operations in the city, the Security Council heard.

General Powell said: "They have been operating freely in the capital for more than eight months. Iraqi officials deny accusations of ties with al-Qa'ida. These denials are simply not credible."

What was new in the American claims was the line drawn between Zarqawi, his alleged Iraqi supporters and a scattering of locations in Europe, including the flat in Wood Green, north London, where traces of ricin were found in December, and the house in Manchester where DC Oake was murdered.

An activist intercepted after training in Zarqawi's Afghan camp, who was named only as Abuwatia, had revealed that at least nine North Africans had been sent in 2001 to conduct attacks in Europe. A total of 116 members of the group had now been arrested, the Security Council heard.

Pointing to a chart showing the geographical spread of Zarqawi's network from rural Spain to Paris, London and the Italian countryside, General Powell said Abuwatia had named his colleagues and their addresses, leading to the arrests in Britain in recent weeks.

General Powell added that Iraq and al-Qa'ida had agreed a non-aggression pact in 1993 and that officials from both sides had met on at least eight occasions since.

The US Secretary of State's claims came after the Foreign Secretary, Jack Straw, declared that Iraq allowed a "permissive environment" in which Bin Laden and al-Qa'ida were able to operate. He said intelligence reports showed there had been links between al-Qa'ida and "various people" in Iraq.

"What we see in terms of intelligence is that the Iraqi regime appears to be allowing a permissive environment in which al-Qa'ida is able to operate," he told the BBC.

Mr Straw's comments were at odds with a leaked report from the Government's Defence Intelligence Staff Agency (DIS), which concluded that a potential relationship between President Saddam and Bin Laden had "foundered" due to ideological differences.

The DIS report acknowledged that al-Qa'ida personnel may have been trained in Iraq but said relations between the regime and the terror network's leadership had broken down. The report said: "While there have been contacts between al-Qa'ida and the regime in the past, it is assessed that any fledgling relationship foundered due to mistrust and incompatible ideology."