South American area is examined for terrorism

CIUDAD DEL ESTE, Paraguay -- Mobsters, smugglers and drug traffickers have long operated freely in the alleyways of this gritty Paraguayan border town, known as South America's contraband capital.

But since the Sept. 11 terrorist attacks in the United States, it's this "Triple Border" region's sizable Muslim community that is coming under the most scrutiny as authorities look for ties to international terrorism.

In the land where Paraguay, Argentina and Brazil converge, authorities have erected highway checkpoints, raided businesses for alleged extremist ties and made arrests -- angering an Arab community whose traditions flow over in mosques and bazaars.

"We feel very strongly discriminated against," said Sheikh Munir Fadel, head cleric at one of the two mosques in Ciudad del Este, 245 miles south of Asuncion. "Others are making us feel that we Muslims are guilty."

Attention on suspected terrorist ties here began even before last month's attacks on the World Trade Center and the Pentagon.

In April, the State Department warned in its annual report on global terrorism that the Triple Border "remained a focal point for Islamic extremism in Latin America." The report said local authorities, despite limited resources, were seeking to curb criminal activity of people thought to be connected to Islamic terrorist groups. U.S. and South American law enforcement authorities have long warned that this region's porous borders, its concentration of Arab-Muslim immigrants and the laxity of police and passport controls could make this an appealing harbor for terrorists and sympathizers.

Links to terrorists

"We do have indications and have had indications of individuals and groups with links to Islamic extremists in the Middle East," said Mark Davidson, spokesman for the U.S. embassy in Paraguay.

In the weeks following the U.S. attacks, local authorities arrested 19 Lebanese, Jordanian, and Syrian citizens for possessing phony visas, raising concerns Islamic fundamentalists could be buying false passports or finding safe harbor here. Seven of the men have since been released; the others remain in custody.

Last year, Paraguayan authorities arrested a Lebanese businessman suspected of financial ties to the Iran-backed extremist group Hezbollah, but he fled the country before he could be prosecuted. In November, police in Paraguay arrested a Palestinian who allegedly made bomb threats against the U.S. and Israeli Embassies in Asuncion.

For decades, Ciudad del Este has been seen by intelligence agencies as an enclave of lawlessness. Founded in 1957, the city attracted businessmen from across the world -- particularly from Asia and the Middle East -- who were drawn by the chance of engaging in commerce largely free of government oversight.

Over the ensuing decades, an illicit trade began to flourish in pirated CDs, guns and stolen cars as the city's sidewalks filled up with makeshift stalls peddling fake Adidas sweat shirts and Rolex watches and pirated software.

Many people can be seen trundling boxes of contraband unchecked across borders.