Paraguayan authorities arrested Moussa Ali Hamdan in Cuidad del Este on June 15, relying on tips from the FBI, which had traced the fugitive to the Triborder zone. A Lebanese-American, Mr. Hamdan is accused of trafficking in stolen goods to help finance Hezbollah with counterfeit money and documents.

"We acted on a request from the U.S. Justice Department for Hamdan's extradition," said Paraguay's interior minister, Rafael Filizzola.

Mr. Hamdan had narrowly escaped capture in the U.S. last year and fled to Paraguay's porous Triborder zone, where tens of thousands of people of Lebanese, Syrian and other Middle Eastern descent live and conduct cross-border commerce. Although officials in the area deny the presence of terror groups, U.S. officials say the Triborder zone is rife with activity to fund such groups.

"We have not been able to confirm the presence of Islamic terrorist cells in Paraguay. But there is a lot of movement of money from the Triborder region to places where these groups operate," Mr. Filizzola told The Washington Times.

Top-level U.S. security officials recently have expressed concern about a growing Middle Eastern presence throughout Latin America, where members of Hezbollah and other groups have been detected in several countries, including Venezuela and Mexico.

"Islamic terrorist networks are present in the Triborder area, as well as other countries in the region," Navy Adm. James Stavridis, former chief of the U.S. Southern Command, recently said in congressional testimony.

"A robust Hezbollah financial support network exists in the region, as well as active sympathizers and supporters of Hezbollah. Also present are Sunni groups like Hamas. Known al Qaeda members have journeyed to Latin America and the Caribbean, and other terrorist-inspired Islamic radicals have been arrested in the region," Adm. Stavridis told Congress.

Based in Lebanon and backed by Iran, Hezbollah in 2006 was accused of carrying out the 1994 bombing of a Jewish community center in Buenos Aires that killed 85 people — the deadliest bombing inArgentina's history. U.S. intelligence officials have uncovered links between Mexican drug cartels and Hamas and other Islamic groups in the Triborder zone.

Authorities in several Latin American countries have reported expanded activity by local leftist groups linked with Colombia's main insurgent group, the Revolutionary Armed Forces of Colombia (FARC).

While FARC recently has been weakened inside Colombia after a series of blows from government forces, leftist groups adopting FARC's tactics, operational methods and strategy appear to be proliferating elsewhere.

Peru's Shining Path guerrillas, who appeared on the verge of extinction some years ago, have made a comeback in the central Andean region where they have taken control of coca leaf plantations in remote valleys, a factor that has contributed to a recent major increase in Peru's cocaine production.

The center-left government of Paraguayan President Fernando Lugo was forced to declare a state of siege in half the country, mobilizing up to 3,000 police and army troops to counter a terrorist campaign waged by the Paraguayan Peoples' Army (EPP), the armed faction of a radical leftist party that formerly supported Mr. Lugo.

"The EPP is a small but very dangerous group which has operational and training links with FARC," said Mr. Filizzola.

Authorities have discovered messages between Paraguayan and Colombian guerrilla leaders in the confiscated computer records of Raul Reyes, a top FARC commander who was killed in a 2008 Colombian government raid on a FARC camp in Ecuador.

Coded e-mails also have been intercepted between EPP's recently jailed founder, Severiano Martinez, and FARC "chancellor" Rodrigo Granda, who was snatched from his hide-out in Venezuela in 2005 by an undercover team that delivered him to face charges in Colombia. The messages show that EPP was getting advice from FARC on managing kidnappings.

Fear of an EPP attack led to the recent withdrawal of a U.S. military medical team that was scheduled to participate in a joint civic action mission with the Paraguayan army in deeply impoverished northern regions that are insurgent strongholds.

Satellite maps showing the planned locations of field hospitals and other facilities for the exercise were found at a raided EPP hide-out in the town of Kurus de Hierro, where members of the group served on the local school board. According to reports in the Paraguay's main newspaper, ABC, a plot for the assassination or kidnapping of U.S. personnel was at "advance stages."

The EPP has collected an estimated $6 million through more then 20 kidnappings it has conducted over recent years. It has mostly targeted prominent members of Paraguay's business community, according to senior security officials who say that the group also is drawing revenues from local marijuana production and cocaine smuggling from Bolivia.

"If the EPP starts coordinating with international terrorist networks, as well as organized crime and powerful Brazilian narco-trafficking syndicates like the Capital Command of Sao Paolo, the situation could get out of control," said Mr. Filizzola.

Three EPP fugitives sought by Paraguay for the kidnapping of a senator's wife have recently taken asylum in Brazil. "We are trying to extradite them, but it's proving complicated," said Mr. Filizzola.