KARACHI, 24 August —The government yesterday froze the funds of two banned sectarian groups, unearthed arms from madrassas run by their patrons in Karachi and freed some 300 activists who were arrested for collecting funds for jihad. Police  also raided a string of mosques in search of illegal weapons.

“We have raided 10 madrassas and mosques and recovered some weapons including pistols and a rifle. We have also arrested around 25 members of two main sectarian groups,” Karachi deputy inspector general of police Tariq Jamil said.

He said Sipah-e-Sahaba deputy provincial chief Abdul Ghafoor Nadeem was among those arrested, along with members of the Tehrik-e-Jafria.

Jameel said the action was not against the parties but part of a campaign to recover illicit arms. Police were checking their claims that the small quantity of arms from the madrassas were licensed and not meant for Sipah-e-Muhammad and Lashkar-e-Jhangvi, allegedly the militant wings of the parties.

The authorities, however, unsealed the offices of Lashkar-e-Taiba and Jaish-e-Muhammad, the two groups after they reportedly agreed to surrender their arms.

An announcement to this effect was made by Interior Minister Moinuddin Haider who disclosed that he had a three-hour meeting with Maulana Salahuddin, Maulana Azhar Masood, Haifz Saeed, and Bakht Zamin, leaders of these groups.

The withdrawal of an earlier government order about a crackdown on these organizations came within less than 16 hours.

Reports said the government was advised that action against Lashkar-e-Taiba and Jaish-e-Muhammad would have demoralizing effect on the activists fighting Indian rule in Kashmir.

In another development, the central State Bank of Pakistan (SBP) yesterday told all banks to freeze accounts of two banned groups Lashkar-e-Jhangvi and Sipah-e-Muhammad often blamed for sectarian violence in the country.

“The government has declared the two groups to be proscribed organizations,” the SBP said in a circular to banks.

“In view of the above, you are advised to take immediate steps to freeze the accounts of the proscribed organizations,” it said.

It was not known whether the two rival groups kept the funds in their own name or in the names of their parent organizations or any patrons.

President Pervez Musharraf earlier this month banned the rival groups and warned two others that they might also be outlawed if found to be involved in sectarian violence.

In Lahore, Sipah-e-Sahaba chief Maulana Azam Tariq said the "uncalled for" raids would "create a wave of unrest in the country. "They (the authorities) are playing with fire," he said.

Meanwhile, more than 300 activists detained across the country in a crackdown on groups collecting funds for waging jihad were released. But officials said the crackdown would continue.

These actions followed the new anti-terrorism law promulgated by the military government last week to stem sectarian violence in the country.

Terrorism in the name of religion had been earning Pakistan and the regime a bad name. Most of the jihad fund collectors were picked up in Karachi, the country’s largest city and commercial center.

The groups reacted strongly to the restrictions imposed on their militant wings, and the police raids on the offices and collection centers of the jihadi organizations in Karachi and in the province of Punjab, where the groups have their headquarters. Islamabad's Dawn newspaper reported yesterday that the militant groups have been asked to lower their profile and media visibility. They have been given two months to redirect their public operations and scale down their presence, the paper said, quoting intelligence sources.