New York, July 7 and Beirut July 8: US authorities thwarted a plot to bomb New York's mass transit system, leading to the arrest of a suspected plotter in Lebanon, the FBI and Department of Homeland Security claimed on Friday.

The 'plot\ was first reported by New York's Daily News, which said it targeted the car-carrying Holland Tunnel -- a detail later denied by a federal law enforcement official who said it involved a rail tunnel between New York and New Jersey.

The Daily News said the intent was to flood the Wall Street financial district. But experts said such an action would not flood Lower Manhattan. The tunnel is dug under bedrock and reinforced with concrete and steel, and a blast inside would not have flooded areas above the water level.

The months-old plot was uncovered by monitoring Internet chat rooms. It was the second domestic threat authorities have said they thwarted in the early stages, following the arrest of seven people last month on suspicion of a plan to attack the Sears Tower in Chicago.

The report was published on the first anniversary of the London suicide bombings that killed 52 people.

"We have disrupted a terrorist network that was in the planning stages of an attack against the transportation system in the New York-New Jersey area. A significant development in this investigation was the arrest of a key suspect by Lebanese authorities. This investigation is ongoing," the FBI and the Department of Homeland Security said in a statement.

The statement also suggested it was linked to al Qaeda, and the Daily News reported it was linked to Abu Musab al-Zarqawi, the Qaeda leader in Iraq recently killed by US forces.

"We know al Qaeda continues to have an interest in attacking the United States. At this point in time, there is no specific or credible information that al Qaeda is planning an attack on US soil," the US statement said.

Lebanese sources previously had confirmed the arrest of Amir al-Andalousi, "who is a suspect in a plot to bomb a tunnel in New York," a Lebanese government source in Beirut told Reuters.

Another political source in Beirut said the suspect was part of a group believed to be linked to al Qaeda and was arrested by the intelligence department of the Lebanese Internal Security Forces.

Lebanese newspapers appearing on Saturday July 8 named the suspect as Asem Hammoud, a Lebanese International University professolr. According to a police statement, Hammoud has been in the custody of the Lebanese military since April 28, 2006. Apparently, he has not been either charged or indicted for any offense.