U.S. authorities are investigating whether $750,000 found in Saddam Hussein's hideaway was part of the loot snatched from Iraqi's central bank at the onset of the war.

The government hopes the deposed Iraqi president's capture might provide new insights into how terrorists raise and move money.

Juan Zarate, the Treasury Department's deputy assistant secretary for terrorist financing and financial crimes, said Monday that a multiagency team is trying to determine whether the cash is genuine and is looking at serial numbers to trace where the money came from.

The prime hypothesis, Zarate said, is that the money was part of the roughly $1 billion that Saddam and his family took in late March or early April, shortly before the United States began bombing Baghdad. The recently discovered cash in Saddam's hideaway was in $100 bills, packaged similarly to the cash taken from the Iraqi central bank (search) and later recovered, he said.

All but about $100 million of the cash taken from the Iraq central bank has been recovered, Zarate said.

A fear of the U.S. government has been that any cash in the hands of Saddam or his cronies could be used to bankroll terror and to wage attacks on U.S. soldiers in Iraq, Zarate said. "You now have $750,000 that is not in circulation and can't be used for bounty on the heads of our soldiers," he said.

Saddam's capture also might provide the United States and its allies important new clues about the methods terrorists are using to raise, move and hide money, Zarate said.

"The capture of Saddam is important," he said, "because of the potential intelligence information that he can provide with respect to financial intermediaries, cronies abroad, financial accounts, etc."

"The other important element of this: We think this may have an important effect on those who are already detained in terms of their willingness to cooperate, especially on such issues as where ... accounts and regime assets may lie," he said.

Zarate said it's far too early to tell what level of cooperation, if any, U.S. authorities will get from the captured dictator.

"With respect to documents and such that were found not only where he was but also on that piece of property, we're working with DOD (Department of Defense) right now," Zarate said. It also is too early to tell what they might provide in terms of leads or other useful information, he said.

The bulk of money used to finance terror, especially that of the Al Qaeda network, is raised and flows internationally, which underscores the importance of working with other countries to choke off the flow of money to terrorists, Zarate said.

The United States faces "challenges with respect to how Al Qaeda is actually refocusing the way it moves money," Zarate said. "We have information that Al Qaeda is using couriers much more because of the strict U.S. crackdown on the formal financial sector."

The couriers Zarate referred to are "trusted members of the network" who are relied upon to raise or move money, such as through bulk-cash smuggling, he explained. The United States, he said, is working closely with other countries.

A recent report by the General Accounting Office (search), Congress' investigative arm, said the government should do a better job of tracking the money that terrorists use to bankroll violence. Zarate said much has been done but agreed that more work is needed.

"This is a long-term campaign that requires both short-term solutions and long-term commitments," Zarate said.