Al-Liby, 49, was caught in Tripoli, CNN reported. He had been living in Libya for more than a year.
The U.S. troops conducted the mission in Libya with Libyan government's knowledge, officials said.
Al-Liby, who used several aliases but lived relatively opening in Libya, is wanted in the United States for his alleged role in the 1998 bombings of the U.S. embassies in Kenya and Tanzania. More than 200 people died and thousands were wounded in the twin attacks.
The FBI lists al-Liby as one of its"Most Wanted Terrorists" and offered a $5 million reward for information leading directly to his apprehension.
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