The arrest by US special forces in Baghdad Monday of the fugitive Abbas brings Italy a step closer to salving an 18-year-old wound left by the hijacking of the Achille Lauro cruise liner, masterminded by the Palestinian extremist.

He was sentenced in absentia in Italy to five life terms for his role in the hijacking of the luxury liner, in which an elderly, wheelchair-bound American tourist, Leon Klinghoffer, was murdered and thrown into the Mediterranean.

But the leader of the outlawed Palestinian Liberation Front has eluded all attempts to bring him to justice, even when, according to Italy's La Stampa daily, Washington offered Iraq military intelligence in 1987 in its eight-year war with Iran in return for the Palestinian's handover.

Castelli said Rome was working to establish which authority it should address the extradition request to, having as recently as January requested Egypt to hand Abbas over.

"We have already asked the Egyptian and Jordanian governments in recent months for the extradition of Abu Abbas, after receiving information that he might be in those countries," he said.

"Now we know that he was captured in Iraq but that he's in the hands of the American authorities. We have to resolve this juridical problem over who to address the extradition request which we will do as soon as possible."

"It's obviously a situation which is unclear from the point of view of international law," the justice minister added.

"Our government has never given up on its pursuit of anyone who has committed crimes on our territory or against Italian citizens. And it will make no exception for Abu Abbas."

Washington, which said it is examining the Italian request, meanwhile rejected the Palestinian leadership's claim that his arrest is illegal under an immunity clause contained in a 1995 Middle East peace accord.

"We're in close contact with the Italian authorities and the legal experts in Washington are examining every aspect of the case," a spokesman at the US embassy in Rome told AFP.

Abbas, who was living in Iraq under the protection of Iraqi President Saddam Hussein, was captured in southern Baghdad by coalition special operations forces supported by the US Army's 3rd Infantry Division, US central command said.

The Italian liner, carrying more than 400 passengers and crew, was seized in October 1985 in Egyptian waters by four heavily armed Palestinians who demanded that Israel free some 52 Palestinian prisoners.

Italian newspapers provided major coverage of the arrest in their Wednesday editions.

Though Abu Abbas was not aboard the vessel, he was the "director" of the events which led to the brutal slaughter of the elderly Jewish holidaymaker, said the Turin daily La Stampa.

"The strategist of terror has never served his sentence for the murder of Leon Klinghoffer and had linked his destiny to that of Saddam Hussein, who financed him and used him to strike Israel," Corriere della Sera said.

Klinghoffer, 69, was pushed to the side of the ship, where one of the terrorist shot him in the head and chest and then threw his body overboard.

Egypt, unaware that Klinghoffer had been murdered, gave the hijackers safe passage in exchange for freeing the ship and its passengers.

But US Navy F-14 fighters intercepted an Egyptian airliner flying the extremists to Tunisia, forcing it to land at a NATO base in Sigonella, Sicily. They surrendered and were taken into Italian custody.

However Abbas, whose real name is Mohammed Zaydan, was at the time considered only a witness by Italy and fled by plane from Rome to Belgrade, eventually seeking sanctuary in Baghdad.

SPACE.WIRE