In what he described as a "strike on the financial foundation" of terrorists, President Bush yesterday warned the international business community that the US would freeze the US assets of companies found to be assisting Osama bin Laden. And he issued an executive order naming individuals and organisations which will immediately face seizure if traced in the US.
In preparation for possible US military action Afghanistan's hardline rulers claimed they had mobilised an additional 300,000 troops but defence analysts believe the Taliban is capable of mustering only 45,000 trained soldiers.
As US military officials arrive for talks in Islamabad, Pakistan pulled out its entire diplomatic staff from its embassy in the Afghan capital, Kabul, but did not sever diplomatic relations. The authorities also re-opened a border post at Torkham on the north-west frontier to allow Afghan refugees to enter the country.
Following Mr Bush's announcement, made on the White House steps, it became clear, however, that the US was adopting a two-pronged military and financial approach in its response to the attacks in New York and Washington. The Treasury now has unprecedented power to freeze US assets of international businesses in punishment of activities abroad, an extension of extra-territorial legislation than in the past, when applied to firms doing business with Cuba, has been opposed by US allies.
The President's spokesman, Mr Ari Fleischer, said, however, they were facing a situation that was "entirely different to anything faced before". Since September 11th, the level of co-operation the US had been receiving had been unprecedented, he said.
The executive order extends the range of Islamic terrorist organisations and fronts covered by designation under domestic legislation introduced by President Clinton in 1988. Listing allows the US Treasury to seize assets and prohibits banks from doing business for those designated. It also allows the withholding of visitor visas.
In addition to bin Laden, some 12 specific terrorist leaders were designated yesterday, including a doctor and the leader of the Egyptian Islamic Jihad, Ayman al-Zawahiri (50), widely believed to be his deputy and potential successor. The latter's organisation, which joined in an alliance with al Qaeda in 1998, is among 11 groups which are also listed. They include militant Libyan, Uzbek and Yememi groups.
Al-Zawahiri, who is seen as providing an important intellectual dimension to the al Qaeda leadership that complements bin Laden's charismatic profile, has been involved with Muslim extremism since the 1970s. He is believed to have left Egypt in 1986, but remains one of the country's most wanted men and has been sentenced to death in absentia.
Three charitable organisations and one company, which are alleged to channel cash to al Qaeda, are on the list.
Flanked by the Secretary of State, Mr Colin Powell, and the Treasury Secretary, Mr Paul O'Neill, Mr Bush said: "Money is the lifeblood of terrorist operations. Today, we're asking the world to stop payment." He called the list "the financial equivalent of law enforcement's most-wanted list."
The US measures, although unlikely to hit hard at bin Laden's well hidden assets, will make it easier for Mr Powell to persuade other states to follow suit. He sees it as one of many fronts in a multifaceted campaign where some states which may be reluctant to support extensive military action may contribute in ways that me just as effective.
In a speech on Russian television, President Putin said Moscow would increase its support of Afghan opposition forces and was prepared to supply anti-Taliban fighters with weapons and military equipment. "We are broadening co-operation with the internationally recognised government of Afghanistan ," Mr Putin said. He was referring to the government-in-exile of President Burhanuddin Rabbani.
