NEW YORK - Three suspects, including a Jewish American, had their remand extended yesterday after being nabbed on suspicion of attempting to smuggle a missile to Muslim terror groups operating inside the United States.

British arms dealer Hemant Lakhani is suspected of heading the half a million dollar operation with two accomplices, Yehuda Avraham, a New York resident and Moinuddeen Ahmed Hameed, of Malaysia, who helped to launder the missile funds.

The three were captured in a sting operation mounted over the past year-and-a-half in coordination among American, Russian and British authorities, the FBI revealed yesterday.

Yehuda Avraham received the payment for the first missile from Lakhani and transferred it to a bank account outside the U.S., and Hameed was to launder the money.

The FBI's anti-terror team in New Jersey said yesterday that the missile that was captured was the first of a larger deal, in which Lakhani was ready to provide 50 anti-aircraft SA-18 shoulder missiles. Lakhani's contact, who presented himself as close to Sudanese underground organizations, was in fact an FBI agent. The FBI started following Lakhani 18 months ago after receiving information that he was interested in buying missiles in Russia.

Avraham, a diamond merchant, was arrested on Tuesday by FBI agents in his office in Manhattan's diamond bourse. Avraham and his son Gideon are the owners of Ambuy Gem Corp. Avraham, who is 75 years old according to a relative, was born in Afghanistan. He was described as an observant Jew who visits the synagogue in his Forest Hills neighborhood regularly. His son told reporters that the arrest was "ridiculous."

A diamond merchant who said he knows Avraham well described him as a quiet, well-liked man, who was probably not aware that he was involved in an illegal deal and certainly had no idea there was any connection between the deal and radical Muslim organizations.