"These are people who are connected to Mr Shahzad. We're still trying to determine exactly what the nature of that connection was," Eric Holder, the US attorney general, after the arrests.

"There's at least a basis to believe that one of the things that they did was provide him with funds," he said.

Holder said investigators were looking into whether those arrested knew what the money would be used for.

'Direct connection'

Authorities have been investigating whether Shahzad, who authorities say needed only a few thousand dollars to buy the used sport utility vehicle and the bomb components used in the attempted May 1 attack, was financed from overseas.

in depth

  Profile: Faisal Shahzad
  Blog: 'All Pakistanis are terrorists'
  Video: Pakistan chases NY bomb plot links
  Video: Bomb scare in New York City
  Timeline: Attacks on US targets

Two of the men arrested in the city of Boston had a "direct connection" to Shahzad, a senior Massachusetts law enforcement official told The Associated Press news agency.

"These people might be completely innocent and not know what they were providing money for, but it's clear there's a connection," the official said.

"That's the focus of the ongoing investigation," the official said.

The three men were reportedly officially arrested on suspicion of visa violations.

US federal agents were seen carrying boxes, envelopes and a crowbar out of a building in Watertown, a working-class town in the Boston area.
Massachusetts authorities said the people had been under surveillance for some time but did not specify how long.

'No immediate threat'

Gail Marcinkiewicz, an FBI spokeswoman, confirmed that the raids had taken "in connection with the Times Square bombing investigation".

The crude explosive device was placed in a vehicle in New York's Times Square [AFP]

However, she told the AFP news agency that there was "no known immediate threat to the public or any active plot against the United States".

Shahzad faces five terrorism-related charges. But he has still not appeared in court or been seen in public since his arrest on May 3 when he was hauled off a flight to Dubai.

"We are doing exactly what, I think, people want us to do, and that is to make sure we get all the information we can with respect to any associates he may have, and other information that would help us to prevent anything further from happening in the United States," Preet Bharara, the prosecutor, said.

In its statement on the latest arrests, the FBI said it could "provide no further details as the investigation is ongoing".

The Pakistani Taliban claimed responsibilityfor the failed attempt to detonate a car bomb in the heart of New York City. If this claim is confirmed to be true, the attempt would be the group's first act in the United States.