The suspect, Mohammed Sohail, was among six people who fired on police from a motorcycle during the confrontation, said Fayyaz Khan, a Karachi police investigator. He said the shooting began when a patrol asked the men to stop at a routine checkpoint in the city, the site of frequent attacks by Islamic militants.
The five other suspects fled, but Sohail fell off one of the motorcycles and was captured, Khan said.
No policemen were injured in the shooting and it was not known whether the attackers suffered any casualties.
After his arrest, Sohail confessed to being a member of the outlawed Islamic militant group, Harkat Jihad-e-Islami, Khan said.
In 2003, a court in Karachi sentenced Sohail to death in absentia for involvement in a May 8, 2002 car bombing in front of the Sheraton Hotel in Karachi which killed 11 Frenchmen, Khan said.
The Pakistani government had been offering a reward of around $40,000 for information leading to his arrest.
Two other militants, both in custody, have been sentenced to death in the attack that killed the French nationals, who were helping build a submarine for the Pakistani navy.
Sohail was allegedly a close aide of Amjad Hussain Farooqi, one of al Qaeda's reputed point men. Khan said Sohail was also believed to have played a role in Pearl's abduction, but he did not give details.
Another police official, requesting anonymity, said Sohail will be interrogated about suspicions that he shot the grisly video that showed Pearl's throat being slit with a knife.
Farooqi was killed in a shootout with security forces last September in the southern city of Nawabshah.
Pearl, who was doing a story on Islamic militancy, was kidnapped Jan. 23, 2002, and later beheaded in Karachi.
Meanwhile, President Gen. Pervez Musharraf admitted Wednesday that terrorists had used Pakistan's South Waziristan tribal region as a terrorist training base.
"Wherever there was terrorism — in Spain, in Africa and Europe — they (terrorists) had somehow links with our country ... they have lived in our country," Musharraf said at a gathering of thousands of supporters in Nowshera, a town 75 miles northwest of Islamabad.
But, Musharraf added, Pakistani military action had "eliminated the terrorist centers" in the rugged region.