The man, Qari Saifullah Akhtar, used to run a vast terror camp in Rishkhor, Afghanistan which was visited by bin Laden and Taliban chief Mullah Mohammed Omar, and where 3,500 men learned combat skills, including assassination and kidnapping.
Akhtar melted away in the hours before U.S. bombing began in October 2001, and had not been heard from since.
"Yes we can confirm that we have Qari Saifullah," Information Minister Sheikh Rashid Ahmed told The Associated Press. He said Akhtar had been arrested in Dubai "in the past week" and had been turned over to Pakistan, but he would not give any details into the raid. Officials in Dubai had no comment.
A Pakistani intelligence official said on condition of anonymity that Akhtar was being held in Lahore, where he was undergoing interrogation.
In other developments:
In Washington, the head of the White House's office of counter-terrorism said Akhtar's arrest was significant, and that he was believed involved in two attempts in December to assassinate President Gen. Pervez Musharraf.
The arrest is "very important, particularly for Pakistan," Fran Townsend said in a broadcast interview. "He's wanted in connection with the two assassination attempts on President Musharraf. He was also involved in the training camps in Afghanistan."
Asked if Akhtar is thought to be someone who's currently operational, Townsend said, "Absolutely. Absolutely."
Ahmed, the information minister, said it was "premature" to say that Akhtar was involved in the assassination attempts.
Akhtar is said to have been active in several Kashmiri militant groups, including the Harakat-ul-Jehad-e-Islami, whose Muslim fighters have fought as far afield as Chechnya and Bosnia.
"He had a hand in various cases," Ahmed said of Akhtar, without giving any details.
Pakistan's Geo television reported Sunday that authorities had arrested another Kashmiri militant, Maulana Fazl-ur Rahman Khalil, on charges that he was sending militants to Afghanistan to join the Taliban insurgency there.
Khalil is said to be the leader of Harakat-ul-Mujahedeen, a group linked to Harakat-ul-Jehad-e-Islami and one of several Kashmiri militant groups banned by President Gen. Pervez Musharraf for its alleged ties to al Qaeda. He helped organize a secret trip by about a dozen Pakistani journalists to interview bin Laden in Khost, Afghanistan in 1998, one of the last interviews granted by the terror chief.
Senior government ministers had no comment on the Geo report, which did not say when or where Khalil was arrested.
Ahmed said the arrest of Akhtar was not linked to the recent capture of two other al Qaeda operatives, Ahmed Khalfan Ghailani and Mohammed Naeem Noor Khan.
Information gleaned from those two arrests helped lead to a terror warning in the United States and a sweep in Britain that has netted about a dozen suspects. About 20 suspects have been arrested in Pakistan as well.
Two South Africans arrested with Ghailani on July 25 had just arrived from the United Arab Emirates, and several other al Qaeda suspects are believed to have transited through that country as well.
Word of Akhtar's arrest follows news that Pakistani agents working closely with U.S. officials are searching for two north African associates of Ghailani, a Tanzanian who had a $25 million bounty on his head for his role in the 1998 bombing of U.S. embassies in east Africa, security officials said Saturday.
The hunt for Abu Farj, a Libyan, and Hamza, from Egypt, began on a tip from Khan, an al Qaeda computer whiz who last month helped Pakistani police arrest Ghailani and whose computer contained photographs of potential targets for attacks in the United States and Britain.
"Yes, our security agencies are looking for Abu Farj and Hamza, but I have no details," said a senior government official, who spoke on condition of anonymity.
Another security official confirmed that Pakistani intelligence agents were searching for the pair. He refused to elaborate and it was not immediately clear when and from where Farj and Hamza entered Pakistan or what they were doing here.
Pakistan, a key ally of the United States in its war on terror, has arrested about 20 al Qaeda suspects in less than a month.
British authorities on Tuesday conducted a sweep in and around London that netted 13 suspects, including a man known as Abu Eisa al-Hindi or Abu Musa al-Hindi, believed to be a senior al Qaeda member who had been plotting an attack on Heathrow.