An extremist Palestinian faction financed by Iranian radicals is alleged to have carried out the bombing of Pan Am Flight 103, and U.S. intelligence knows where the bombers are, The Sunday Times of London reported.

The newspaper, quoting unidentified sources in Washington, said the Popular Front for the Liberation of Palestine-General Command made and planted the bomb on behalf of Iranians seeking revenge for the U.S. Navy downing of an Iranian civilian jetliner over the Persian Gulf on July 3. All 290 people on board the Iranian plane were killed.The newspaper quoted one source as saying the Palestinian group was paid $10 million to destroy the New York-bound Pan Am jumbo jet, which broke apart over Lockerbie, Scotland, on Dec. 21, killing all 259 people aboard and 11 on the ground.

The group has been linked to the bombing in previous newspaper accounts.

The organization is led by Ahmed Jibril, a Palestine Liberation Organization renegade who opposes PLO chief Yasser Arafat's drive for peace negotiations with Israel.

The Sunday Times said senior PLO officials also are convinced, after months of their own inquiries, that Jibril's faction planted the bomb at the bidding of unidentified Iranian radicals.

It said U.S. intelligence has informed all Western intelligence services involved in the hunt "of the exact whereabouts of the Jibril bombers" and "plans are being made to capture the men and bring them to trial in America."

It gave no indication of the whereabouts of the alleged bombers.

At the State Department in Washington, spokeswoman Sondra McCarty said Saturday night, "I have nothing on that at all."

U.S. officials have said the Iranian airliner was shot down by the USS Vincennes in the gulf when the ship mistook it for an attacking warplane.