Kidnapped Reporter's Fate in Doubt

Confusion surrounded the fate of the kidnapped Wall Street Journal reporter Daniel Pearl last night as conflicting reports from Pakistan said he had either been killed or would be freed for $2m.

CNN said it had received an email informing it that the 38-year-old journalist had been executed by the National Movement for Restoration of Pakistani Sovereignty, which has been holding him since January 23. "We have killed Mr Danny and now Mr Bush can find his body in the graveyards of Karachi," the email reportedly said. "We have thrown him there."

CNN spokeswoman Christa Robinson said: "We did receive an email reporting that Daniel Pearl was killed."

But a contradictory report, from police in Karachi, said a telephone caller to the US embassy in the city had demanded the ransom.

US investigators believed the call to be genuine, according to the news channel MSNBC.

The kidnappers were also said to be demanding the release of the former Taliban ambassador to Pakistan, Mullah Abdul Salam Zaeef, before they would free Mr Pearl. Zaeef is currently in US custody.

The caller gave Washington 36 hours to comply with the request or the reporter would be killed. MSNBC reported that the email appeared to come from the same address as earlier messages from the kidnappers. But, unlike previous emails, it did not include a photographic attachment of Mr Pearl, fuelling hopes it could be a hoax.

A US diplomat in Karachi declined to comment. "There are a lot of rumours out there and we are trying to run them down," he said.

Responding to the report that Mr Pearl had been killed, Steve Goldstein, vice-president of Dow Jones, which publishes the Wall Street Journal, said: "We have seen the latest reports, and we remain hopeful that they are not true."

A US state department spokesman said it had been sent a copy of the email but refused to comment further.

As the second deadline passed, Pakistan's foreign minister, Abdul Sattar, said records of calls made from a mobile phone used by the prime suspect in the kidnapping, indicated an Indian link.

New Delhi dismissed the remarks as "ridiculous" and called for Pakistan to produce names of the people involved.

Mr Pearl, who is based in Bombay, went missing in Karachi while writing a story about al-Qaida in Pakistan.

Shortly before he disappeared he was understood to have met Mubarak Ali Shah Gilani, the head of an Islamic militant group Jamaat al-Fuqra, which was founded in the US more than 20 years ago.

Pakistan has come under immense US pressure to end the kidnapping quickly and peacefully. Colin Powell, the secretary of state, has telephoned General Pervez Musharraf, the Pakistan president, to discuss the case.

President Bush said he was very concerned and the FBI was working closely with the Pakistani police.

"We will continue to do everything we can to rescue him," he said.