FBI laboratory tests have concluded that C-4, a military-style plastic explosive, was used in the attack on the USS Cole in Yemen, a federal law enforcement official said today.

And in another development in the investigation, U.S. and Yemeni negotiators were near an agreement that would let FBI agents in Yemen observe interviews with suspects and witnesses and submit questions, but they could not participate directly in questioning, said the official, who requested anonymity.

President Clinton, Secretary of State Madeleine Albright and FBI Director Louis Freeh had appealed to Yemen’s leaders to allow joint questioning.

Two former counterterrorism officials said the use of C-4 in the attack that killed 17 U.S. sailors suggested at least that an organized group was behind the attack. One of them said it raised the possibility of state support but fell short of conclusively indicating some government sponsored the attack.

C-4 is a plastic explosive developed for the U.S. military in the Vietnam era. “It lasts forever. It doesn’t deteriorate,” said Vince Cannistraro, a former CIA counterterrorism expert.

Used During Persian Gulf War

The explosive is made for military use in the United States and in at least several NATO nations. It is not available on the open market, like the fuel oil and fertilizer used to make the bomb that destroyed a federal building in Oklahoma City.

Although the C-4 formula is not a secret, one former U.S. military counterterrorism expert said, “C-4 is not used in industrial blasting. It usually comes from a military source.”

“Organized criminal groups have stolen C-4,” this former military official said, speaking on condition of anonymity. “It requires some amount of organization to do that. But it doesn’t require government-level support to get it.”

Cannistraro said C-4 has been included in U.S. military sales to Saudi Arabia, Kuwait and even to Iran while the shah was still in power. The U.S. military used it during the Persian Gulf war.

Renegade ex-CIA agent Edwin Wilson was convicted of shipping 21 tons of it about two decades ago to Libya for use in what the U.S. government said was a school for terrorists he set up there.

“C-4 can be stolen, but it’s not easily obtainable by small groups,” Cannistraro said. He said he had been told that between 400 and 700 pounds of the C-4 was used to blast a 40-by-40-foot hole in the Cole’s armored hull.

Not Tied to Specific Groups “That possibly points in the direction of some state support, because that’s a lot to steal,” Cannistraro said. But he said further evidence of that would depend in part on whether the FBI lab could use the residues left by the blast to determine the exact chemical formulation of the C-4 used in the blast and thus trace its manufacture to one particular country.

Cannistraro said the use of C-4 did not point to any particular terrorist group. Osama bin Laden, the millionaire Saudi exile who has been charged by U.S. prosecutors with masterminding the bombing of U.S. embassies in Tanzania and Kenya, did not use C-4 there, Cannistraro said. “They used RDX detonators there, but not RDX explosives.” RDX is a component of C-4 and other explosives.

Nevertheless, Secretary of Defense William Cohen said Monday, “We are looking very closely at Osama bin Laden to see whether or not he in fact, or organizations he supports, are in some way connected” to the Cole attack.

Meantime, the crippled Cole has been lifted onto the deck of a specialized transport ship, the Blue Marlin, which has begun carrying the destroyer back to the United States, the Navy said Wednesday.

The Navy also said the remaining 217 members of the crew of the Cole will return by plane to Norfolk Naval Station in Virginia on Friday. Most of them will go on leave and later return to their Cole detachment in Norfolk.

Some sailors from Norfolk volunteered to fly out to stay on board the Cole as it journeys back to the United States, enabling the entire Cole crew to come home, Pentagon officials said Wednesday. Some U.S. engineers and other technical experts also were on board to assess the damage.

For two weeks after the bombing, the Cole crew remained aboard, keeping the crippled ship stable in Aden harbor, recovering bodies and preparing it for the journey back to the United States.

The Cole is not expected back until early December. It most likely will return to Norfolk, but the Navy said no final decision had been made.