Mustafa Abu al-Yazid, the third-highest ranking al-Qaeda commander, outfit's banker and the man who threatened India with more Mumbai-style attacks, was killed along with his entire family in an American missile strike in Pakistan's tribal areas in the last two weeks.
Yazid, 54, also known as Sheikh Sa'id al Masri, considered to be a relative of Osama bin Laden, was killed along with his family in a drone attack, US officials said.
His death was confirmed by al-Qaeda through jihadist websites. The message from al-Qaeda to jihadist forums said his wife, three of his daughters, his granddaughter, and other men, women, and children, were killed.
Yazid had appeared in video last year warning India of more Mumbai-style terror attacks if it tried to attack Pakistan.
"India should know that it will have to pay a heavy price if it attacks Pakistan," Yazid, who had been named as al-Qaeda's chief operational commander and ranked behind No 2 Ayman al-Zawahiri, had said in a 20-minute video in Arabic.
"The Mujahideen will sunder your armies into the ground, like they did to the Russians in Afghanistan... They will target your economic centres and raze them to the ground," he had warned.
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The US officials described his death as the "hardest blow so far" to al Qaeda, adding the organisation's fighting capability had been degraded to a high extent by drone attacks.
"Al Masri was the group's chief operating officer with a hand in everything -- from finances to operational planning," a US official was quoted as saying by the Los Angeles Times.
The al-Qaeda message, carried by the SITE group which monitors jihadist websites, did not give any details about the circumstances of his death, other than to say "he had attained martyrdom".
"His death will only be a severe curse on the life of the infidels. The response is near," the message said.
LA Times, quoting FBI, said it was Yazid who transferred funds via Dubai for Mohammad Atta, Marwan al Shehri and Wali al Shehri - three of the 9/11 hijackers who flew an aircraft into the World Trade Centre twin towers and the Pentagon.
Yazid, an Egyptian, who had close links with fellow Egyptian and al-Qaeda number two Zawahiri, was a former member of the Islamic Jihad movement in Egypt and served time in jail over the 1981 assassination of President Anwar Saadat.
He was al-Qaeda's main conduit to Osama bin Laden and Zawahiri, and went into hiding after the 9/11 attacks and surfaced only in May, 2007 during a 45-minute interview on the pro-militants al-Sabah website in which he was introduced as the officer-in-charge of al-Qaeda's operations in Afghanistan.
A fluent Pashto speaker, Yazid was believed to be very close to the Taliban chief Mullah Omar, and was believed to be a proponent of the policy of al-Qaeda being involved with Taliban at every level.