Turkey's state-run news agency says police have caught a man trying to sell a jeweled dagger allegedly pillaged from the palace of former Libyan dictator Moammar Gadhafi.

Police on Monday confiscated the dagger during a raid in the Istanbul suburb of Esenyurt, the Anadolu Agency reported.

A businessman, who allegedly bought the dagger for $4.6 million in Libya three months ago, and two suspected accomplices were detained in an anti-smuggling operation.

Identified by his initials, A.A., the businessman was caught trying to sell the dagger to a Saudi national for $10 million.

Gadhafi was overthrown and killed in 2011 after a NATO-backed uprising. The Islamic State group and other extremists have gained ground in the power vacuum following Gadhafi's ouster.

The three suspects were released pending trial.