DHAKA - Bangladeshi police said Tuesday they had arrested a top Islamic party leader in connection with a deadly grenade attack that wounded Prime Minister Sheikh Hasina in 2004.

Maulana Sheikh Abdus Salam, head of the Islamic Democratic Party (IDP), was detained by police on Monday and remanded in custody for questioning over the grenade attack that left more than 20 people dead, police said.

Salam was a founder and former chief of the banned Harkat-ul Jihad al Islami (HuJI), which has been accused of carrying out the attack in the capital that also killed the wife of current Bangladesh President Zillur Rahman.

"He has been arrested in connection with the grenade attack case. He was a former emir (chief) of HuJI and police suspect that he could have a role in the attack," deputy commissioner of police Ruhul Amin told AFP.

Hasina survived the blast but one of her ears was severely damaged.

Salam, who fought in the Afghan war against the Russians, returned to form the HuJI in Bangladesh with hundreds of other war veterans in the early 1990s.

The party was banned in 2005 after police blamed it for a series of deadly blasts, including an attack in May 2004 that injured Britain's most senior diplomat in the country and killed three people.

Three men including the then HuJI chief Mufti Abdul Hannan were sentenced to death in 2008 after they were convicted of murder, use of explosives and masterminding the attack on the envoy.

Mufti Hannan, now in custody, is also one of the prime accused in the grenade attack case.

Maulana Salam broke away from the HuJI and launched the IDP in October 2008 ahead of December general elections. But the election commission barred the party from contesting the polls.

Last month police also named former home minister Lutfozzman Babar, currently in prison for illegal arms possession, as a suspect in the grenade attack.