The man, identified as Muhammad Saif-ur-Rehman Khan by the US State Department, was arrested on Monday at the embassy in Santiago. A police source said the explosive was Tetryl, a compound used as a booster to help detonate explosive charges, adding the traces were found on his documents and mobile telephone.
A senior State Department official said Khan, a 28-year-old student who had been in Chile for four months, was invited to the embassy to be told his visa for the United States was being revoked. The US official, who spoke on condition of anonymity, said he was not aware of any link between Khan and the Pakistani-American accused of trying to bomb New York's Times Square on May 1.
"Based on the information that we had, we revoked his visa," the official said, declining to give the reason. "We are required to notify individuals when we take that action and we invited him in."
During routine visitor screening at the embassy, Khan was found to have traces of explosives on his clothes and was later detained by Chilean police, State Department spokesman PJ Crowley said at his daily briefing in Washington. Asked if there was a legitimate reason why the man might have been exposed to explosives -- such as working at a site where they are used -- Crowley replied: "We'll see."
"At this point ... we don't think that this was a spurious hit on our detection system," he said. Khan denied any wrongdoing and criticised the United States. "I have nothing to do with bombs. I have nothing to do with terrorists. I don't have a beard. I am an articulate man, I'm a working man, I'm a student here, I'm doing an internship in a hotel," Khan told reporters.
"They (the United States) just want to cover up their shame and guilt for what they have done or are doing in Iraq and Afghanistan," he said. "I have nothing to do with any chemicals. I have never seen anything like this in my life."
A state prosecutor invoked Chile's anti-terrorism law to prolong Khan's detention while he is being investigated and a judge granted a five-day extension. Khan is to be held at a maximum security prison. Police searched Khan's lodgings in Santiago overnight but a planned court appearance was delayed. Instead, he was taken to a hospital for a routine check-up ordered by a court.
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