March 9 (Bloomberg) -- Abu Abbas, the leader of the Palestinian group that hijacked the Italian cruise ship Achille Lauro in 1985 and killed a U.S. citizen, died in U.S. custody yesterday, a U.S. Defense Department official said.

``Initial reports indicated that he died of natural causes,'' said Bryan Whitman, a Pentagon spokesman. ``Medical efforts to revive him were unsuccessful. An autopsy will be performed.''

The U.S. captured Abbas April 14 in southern Baghdad during combat operations in Iraq. Four terrorists from the Palestine Liberation Front hijacked the Achille Lauro on Oct. 7, 1985, and demanded the release of 50 Palestinian prisoners held in Israel. Abbas, while not one of the hijackers, was the mastermind of the operation, authorities said.

The militants killed American tourist Leon Klinghoffer, a 69- year-old New Yorker confined to a wheelchair, and singled out because he was Jewish. The terrorists threw his body into the Mediterranean Sea after the murder.

The other hostages on the vessel were freed after the Egyptian government arranged for the hijackers' asylum. The plane carrying them, and Abbas, to Tunisia, where the Palestine Liberation Organization was based at the time, was intercepted by U.S. Navy fighters and forced to land in Sicily.

The standoff between Italian Prime Minister Bettino Craxi and U.S. President Ronald Reagan that followed is one of the best- known episodes in Italian foreign policy.

Italian military police surrounded the plane after it landed and refused to let American soldiers based in Sicily take the terrorists into custody. The standoff lasted all night, and Craxi got his way. The hijackers were tried in Italy.

Abbas was set free and left the country. Later, Italian authorities tied him to the planning of the hijacking and sentenced him in absentia to life in prison.

To contact the reporter on this story: Todd Zeranski in New York at tzeranski@bloomberg.net Tony Capaccio in Washington at acapaccio@bloomberg.net

Last Updated: March 9, 2004 17:52 EST