Police in Italy and France have arrested several Algerians and two Italians suspected of raising funds and providing fake documents to a militant Algerian Islamic group with links to al-Qaida.

Italian investigators say Naples was the logistic base for the production of false documents, which may have allowed entry of terrorists or subjects with close contacts to terrorist cells.

In a dawn anti-terrorist operation, Italian police arrested six Algerians and two Italians in Naples, the nearby city of Caserta and in Milan. Antonio Sbordone of the Italian anti-terrorism police in Naples said the men are accused of providing fake documents.

Sbordone said Naples is a sort of European capital for the sorting and production of fake documents.

Police found printing presses where these fake documents were being produced in large numbers. The documents were for use by anyone and allowed access into any chosen country, not necessarily in Europe.

Police say the fake documents were sold according to a list of prices, starting from a minimum of nearly $200. Twice a week buses would depart from Naples with the documents and other counterfeit goods headed for France and from there to Algeria.

Investigators say the Algerians arrested in Italy had links with terror groups. The two Italians arrested are accused of corruption for allegedly taking money in exchange for providing the fake documents.

Investigators say that the selling of false papers and permits also allowed those arrested to raise money to help fund an Algerian militant group, the Salafist Group for Preaching and Combat.

The group, known by its French initials GSPC, is fighting for the creation of an Islamic state in Algeria and has declared allegiance to Osama bin Laden's al-Qaida terrorist network.

An investigator in Naples, Stefania Castaldi, said the Italian operation was also preventative, intended to put an end to efforts that can make it easier for subjects to move to the next step.

As arrests were being carried out in Italy, French police were doing the same in the southeastern city of Marseilles, as part of a joint Italian-French operation dubbed Bon Voyage.

At least four Algerians were arrested in France.