Pakistani police said Wednesday that a British-born Islamic militant freed by India in a hijacking two years ago has emerged as a key suspect in the kidnapping of Wall Street Journal reporter Daniel Pearl.

Ahmad Omar Saeed Sheikh, 27, also known as Sheik Omar Saeed, is believed by police to have provided pictures of Pearl in captivity. They were sent to news organizations five days after the 38-year-old reporter disappeared in Karachi.

Police said three people had been arrested in Karachi for sending the e-mails, and one of them claimed he received the pictures from Saeed. Police also raided houses in the eastern city of Lahore and detained some of Saeed's relatives — a common police tactic here to pressure criminal suspects to surrender.

Several people have been identified as suspects in the kidnapping, but police said they believe Saeed is the key figure. He was jailed in India for kidnapping foreign tourists in Kashmir.

Pearl, the Journal's South Asian bureau chief, has not been seen since he left for an appointment Jan. 23 with a Muslim contact at a popular Karachi restaurant. Employees of the restaurant did not recall seeing Pearl that night.

Saeed and others were freed by India on Dec. 31, 1999, in exchange for passengers aboard an Indian Airlines jet that was hijacked to Kandahar, Afghanistan. Born in the East End of London, he is believed linked to two militant groups — Jaish-e-Mohammed and Harkat ul-Mujahedeen. The United States considers both to be terrorist organizations with links to Al Qaeda.

Police now believe they are making significant progress in solving the case, which has been deeply embarrassing to President Pervez Musharraf's government. Musharraf is expected to meet President Bush at the White House next week.

"All I can tell you is that we are making, we have made, significant progress, and we hope to recover him soon," Karachi Police Chief Sayed Kamal Shah told Associated Press Television News.

"We are doing our best. We are working day and night, around the clock. When I say around the clock I really mean it. We hope to [resolve] the case soon, Inshallah [God willing]," Shah said.

Another key suspect — Mohammed Hashim Qadeer — is believed to be a member of Harkat-ul Mujahedeen. Qadeer's family claims he was killed in Afghanistan, but police remain skeptical and say he was one of Pearl's contacts in the Islamic militant movement.

Jameel Yousuf, head of Karachi's police-citizens liaison committee, said he believed Pearl was trying to arrange an interview with Sheik Mubarak Ali Shah Gilani, leader of a small religious movement.

Pearl met with Yousuf shortly before he left for his appointment at the restaurant. Yousuf believes Saeed laid a trap for Pearl.

"Dan asked only to meet Gilani. This way a trap was laid. Everyone thinks you are going to meet 'a' and 'b' takes you," Yousuf said.

Pearl was believed trying to find Pakistani links to Richard C. Reid, the so-called "shoe bomber" who was arrested after allegedly trying to blow up an American Airlines flight from Paris to Miami on Dec. 22. He was overpowered by flight attendants and passengers as he allegedly tried to light a fuse protruding from his sneakers.

Yousuf said Pearl had found evidence that Reid sent an e-mail to someone in Pakistan after he missed his first flight to the United States. Reid was apparently looking for instructions, Yousuf said, adding that he gathered such information during conversations with Pearl.

Pearl had also been meeting with other Islamic conservatives in Karachi.

Asad Thanvi, a provincial director of the pro-Taliban Afghan Defense Council, said he met Pearl several days before his disappearance.

"He sat right there on the couch," Thanvi said, gesturing toward a pale sofa. Pearl wanted to know Thanvi's reaction to the U.S. bombing of Afghanistan.

"He wanted to have my views of what was happening in Afghanistan, the elimination of the Taliban, the bombing by the U.S. of innocent Muslims," said Thanvi, who also is a member of the Jamiat-e-Ulema Islam.

Thanvi's group was vehemently opposed to the U.S.-led air campaign against Afghanistan and Pakistan's support for Washington.

Hoax e-mails have complicated the investigation. Only two e-mails, both sent last week and including photos of Pearl, are believed to be genuine.

The first message, sent Jan. 27 and signed by the National Movement for the Restoration of Pakistani Sovereignty, a previously unknown group, included demands that Washington return Pakistani prisoners held at the U.S. base in Guantanamo Bay, Cuba, for trial in Pakistan. The Bush administration has ruled out any negotiations.

Mariane Pearl, 34, pregnant with the couple's first child, wrote in Pakistan's The Nation newspaper that her husband's captors "are preventing a man from writing about their concerns and accomplishing his chief work: to create a bridge between cultures."

"My husband can't change foreign policy, but he can give voice to people — he can express the views of the people who hold him to the world," she wrote in an appeal published Wednesday.

The Associated Press contributed to this report.