Abu Anas al-Libi appeared in a packed Manhattan federal court and entered the not guilty plea.
Libi, who had a USD 5 million bounty on his head, was brought to the US over the weekend.
Libi, 49, was captured on October 5 in a raid by US Delta Force commandoes in Tripoli. Since his capture, Libi was held and interrogated onboard a US Navy ship in the Mediterranean.
Libi was wearing loose white sweat pants and a black sweatshirt and had his hands cuffed as he appeared in the Southern District of New York courthouse. His capture ended a 15-year manhunt.
US Attorney Preet Bharara said in a statement yesterday that Libi was transferred to law enforcement custody this weekend and was brought directly to the Southern District of New York where he has been under indictment for more than a decade.
Libi had been indicted in 2000 for his role in the 1998 bombings of the American embassies in Kenya and Tanzania.
The indictment charged him with helping to conduct "visual and photographic surveillance" of the US Embassy in Nairobi in 1993 and again in 1995.
Prosecutors said in the indictment that Libi had discussed with another senior Qaeda figure the idea of attacking an American target in retaliation for the US peacekeeping operation in Somalia.
The bombing in Kenya killed 213 people while about 5,000 people were injured while the attack outside the US mission in Tanzania killed 11 people and injured 70.
Libi, who had lived in the United Kingdom, where he has political asylum, was on the FBI's list of most wanted terrorists.
The December 2000 indictment charged him in the overall conspiracy, led by Osama bin Laden's Al Qaeda organisation, to kill US nationals and engage in other illegal acts.
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