"Jabir al-Banah, who is accused by the United States of heading the 'Lackawanna six' cell and has a five-million-dollar prize on his head, has been under interrogation in a Yemeni prison for several weeks," a security source was quoted as saying on the website of President Ali Abd Allah Salih's party.
The unnamed source did not say when or where the terror suspect was detained.
The "Lackawanna six," all US citizens of Yemeni descent, were accused by US authorities of attending a terrorist training camp affiliated with Usama bin Ladin's Al-Qaida network in Afghanistan in the spring of 2001, before the September 11 attacks in the United States.
The group's members were rounded up in Lackawanna, south of Buffalo, New York, in September 2002 and accused by the FBI of being part of an Al-Qaida sleeper cell. Last year, they pleaded guilty to providing material support to a terrorist organisation by attending the camp.
Al-Banah, born 39 years ago in the Yemeni province of Daleh, never returned to the United States from Afghanistan and was the only member of the cell still at large. US authorities offered a $5 million reward for information leading to his capture.
The GPC's website did not say if negotiations were under way with the United States for his extradition.
But Yemeni Foreign Minister Abubakr al-Kurbi is due in Washington on 3 February for talks with US officials expected to cover cooperation in fighting terrorism, according to a report on Thursday in the official weekly September 26.
Kurbi will hold talks with Secretary of State Colin Powell, Defence Secretary Donald Rumsfeld and FBI director Robert Mueller, said September 26, mouthpiece of the Yemeni defense ministry.
Yemen, at the request of Washington, has cracked down on suspected members of Al-Qaida since the September 11 attacks for which the terror network was blamed and has received US help in fighting the members.