ROME (AP) _ A Palestinian terrorist convicted of killing an elderly American aboard the hijacked cruise ship Achille Lauro was captured Friday in Spain, three weeks after he failed to return from a prison furlough.

Tipped off by an intercepted phone call, Spanish police tracked Youssef Magied al-Molqi to Estepona, a resort on the Costa del Sol. He was unarmed and offered no resistance, Italian police Chief Fernando Masone said.

The Justice Ministry said it had taken steps toward extraditing al-Molqi from Spain, where he is in custody.

Authorities were still trying to determine al-Molqi's escape route after he failed to report back to Rome's Rebibbia prison on Feb. 28 during a 12-day prison ``holiday.''

Spanish police found the terrorist after intercepting a telephone call he made March 16 from the Seville area to woman friend in Prato, a town near Florence, Masone said. He had been traveling under a false or stolen Italian passport, the chief said.

Police described the arrest as a joint Italian-Spanish police operation. ``For us,'' Massone said, ``it was the end of a huge nightmare.''

Al-Molqi, 33, is the third terrorist out of the four-man team of hijackers to escape Italy while serving time for the 1985 hijacking of the Italian liner during a Mediterranean cruise.

His escape particularly angered the United States because he was the hijacker convicted of shooting Leon Klinghoffer in the head and the chest as the 69-year-old New Yorker sat in his wheelchair on the ship's deck. Al-Molqi ordered his body pushed overboard.

The liner was hijacked off Port Said, Egypt, and more than 300 people aboard were held hostage at sea for two days until the commandos surrendered to Egyptian authorities.

The U.S. government had demanded that Italy do everything possible to find al-Molqi, offering a reward of up to $2 million for information leading to his recapture. Italian authorities offered their own reward.

Since beginning his 30-year sentence, Al-Molqi had returned from furloughs three times. Still, Italy's justice minister accused a judge of negligence for allowing Al-Molqi a fourth furlough, the one during which he escaped. Italy's foreign minister, Susanna Agnelli, said it was time to review the law that made such ``good conduct'' leaves possible for terrorists.

FBI Director Louis J. Freeh last week met in Washington with Italian anti-terrorism police working on the matter. He said FBI officials in Rome and Madrid helped in the case, and praised Italian and Spanish authorities for the capture.

The Achille Lauro case caused severe tension in the traditionally strong U.S.-Italy relationship.

Al-Molqi admitted being the ringleader aboard ship. But the alleged mastermind of the hijacking, Mohammed Abbas, leader of a hard-line faction of the Palestine Liberation Organization, was allowed to slip out of Italy.

Despite U.S. protests, the Italian government, then led by Bettino Craxi, said there was no evidence to hold Abbas. Later, Abbas was tried in absentia and sentenced to life imprisonment.

Tullia Zevi, head of Italy's Jewish community, was attending a lunch at the American Embassy when Ambassador Reginald Bartholomew announced the news of the hijacker's recapture. The room burst into applause. ``I share the common satisfaction and relief,'' she said.

In Washington, Justice Department spokesman John Russell said there are no U.S. charges pending against al-Molqi, because his crime was committed before the enactment of laws allowing charges for crimes against Americans abroad.

Nevertheless, Russell said, ``We are studying our old piracy statutes and reviewing our evidence to see if they might be applied in this case.'' If a charge could be brought under those laws, the United States would then seek his extradition so he could be put in trial, Russell added.