Amjad Farooqi was killed by security forces in a two-hour gun battle in Nawabshah, in Sindh province on Sunday.
“We’ve eliminated one of the very major sources of terrorist threat,” President Musharraf said.
Farooqi was wanted in connection with attempts to kill the president and the murder of US reporter Daniel Pearl.
Chief Karachi police investigator, Fayyaz Leghari, said a mobile phone call intercepted by intelligence agencies this month led them to Farooqi’s new hideout.
The government says it has detained more than 70 terror suspects since July, when an alleged al-Qaeda computer expert and a Tanzanian wanted for east African embassy bombings in 1998 were held.