Pakistani police had announced a breakthrough in the case with the arrest of a man who was thought to have arranged meetings for Pearl with Islamic militants.
However, the man thought to be Mohammad Hashim Qadir turned out to be someone else and is to be released. According to the Pakistan Interior Ministry, FBI agents had now joined with Pakistani police in the hunt for Pearl.
The latest twist in the case came as the family of Mullah Abdul Salam Zaeef, the Taliban's former ambassador to Pakistan, denied any connection to the case and called on the group holding the reporter to released.
The group thought to be holding Pearl has demanded the release of Pakistani prisoners, captured by US military in Afghanistan, and of Mullah Abdul Salam Zaeef, who is also being held by the US.
Pearl had been in Pakistan working on a story about the British shoe bomber Richard Reid and his possible links to Osama bin Laden's Al-Qaeda terror network
The group holding Pearl is one previously not been heard of and is calling itself the National Movement for the Restoration of Pakistani Sovereignty.
At the end of last week, it was reported that 38-year-old Pearl had been executed after several emails were sent. These are now believed to be false and he is still believed to be alive.
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