Federal prosecutors charged yesterday that a Canadian woman apprehended earlier this week while crossing the border into Vermont had connections to a militant Algerian Islamic group, marking the second time this month that suspects arrested entering the country from Canada have been alleged to have terrorist ties.

Lucia Garofalo, 35, who was arrested at a remote border crossing Sunday night, was carrying a cellular phone registered to a man believed to be connected to the Algerian Islamic League and driving a car co-registered in his name, authorities said. Also arrested with Garofalo was her passenger, Bouabide Chamchi, 20, another Algerian national about whom relatively little is known. Both were ordered held without bail yesterday by U.S. Magistrate Jerome Neidermeier.

American and Canadian authorities have no evidence connecting Garofalo and Chamchi with Ahmed Ressam, an Algerian arrested last week while crossing into Port Angeles, Wash., with a carload of bomb-making materials. Authorities believe Ressam, who was indicted yesterday on charges of transporting explosives, making false statements and smuggling, may be connected to Algerian militants based in France and possibly to exiled Saudi terrorist Osama bin Laden.

With concern about millennium-related terrorism on the rise after the arrests, the FBI yesterday released a preventive statement warning of an uncorroborated--and apparently unrelated--threat that mail bombs might be sent to the United States from Frankfurt, Germany. "The U.S. government received unsubstantiated information that individuals may be planning to send bombs in small parcels to addresses in the United States," the statement said. "The information received indicates that the parcels would be sent from Frankfurt, Germany."

The bureau advised that, "out of an abundance of caution," anyone receiving a package from Frankfurt or one that bears postal markings or stamps from Frankfurt should be "cautious." If the parcel is from someone the recipient knows, it is most likely safe to open. If the parcel appears to be from an unfamiliar sender, or bears no information about the sender, the FBI urges people not to handle the package and to call their local police immediately.

Despite the warning, the FBI and Justice Department sought to calm fears about terrorist attacks on major U.S. cities, putting to rest a widely reported rumor that Washington, New York and Seattle were known to be terrorist targets. "We're not confirming that at all," said FBI spokesman Steven Berry.

In Vermont yesterday, prosecutors described how intelligence officials linked a cellular phone in Garofalo's possession to a complex tapestry showing her apparent relationship with the Algerian Islamic League.

U.S. Attorney Charles R. Tetzlaff included the information in a motion filed yesterday asking a federal judge to give the government more than the usually allotted three days to investigate Garofalo and Chamchi before a hearing is held to determine whether they should be eligible for bail.

"A substantial investigation has been mounted to assess the needs for the defendants to be detained," the motion stated. "Particularly troubling is the connection between the defendants and persons affiliated with known Algerian extremists or terrorist organizations and sympathizers. Because of the possible ramifications for national security, this is far from an ordinary detention case."

Garofalo's attorney, Maryanne Kampmann, did not return calls asking for comment, but Reuters reported that Kampmann told the judge that the government's case was "based on association and innuendo."

Garofalo and Chamchi were arrested around 8 p.m. Sunday when they were stopped at the border because of two suspicious attempts Garofalo had made to cross in the previous two weeks. On Dec. 6, Garofalo apparently crossed into the United States with a Pakistani man whom she identified as Canadian. And on Dec. 15, she was prevented from entering the country in the company of another Algerian-born man.

After Garofalo and Chamchi were stopped on Sunday, trained dogs detected what may have been explosive residues in the car, and inspectors found a false French passport in Chamchi's jacket. Garofalo was charged with smuggling an alien into the United States, and both were charged with conspiring to use the false passport.

An analysis at the FBI laboratory in Washington found no evidence of explosives, the court filing said, adding that one additional test, for the presence of nitrates, had not yet been performed on the samples.

Working with the Royal Canadian Mounted Police and the Canadian telephone company CANTEL, officials determined that the account for Garofalo's cell phone had been opened by a man named Brahim Mahdi on July 29 and transferred to Garofalo four days later.

The car Garofalo was driving--and had also driven on Dec. 6 and 15--is registered to Mahdi and Sabastiana Garofalo, whom prosecutors declined to identify. Mahdi is described in the court filing as an Algerian national and a "primary member of a group known as the Algerian Islamic League."

Intelligence sources indicated to prosecutors that the Algerian Islamic League was founded and directed by Mourad Dhina, an Algerian international arms dealer who lives in Switzerland and is connected to organizations sponsoring terrorist acts in Europe and Algeria. "Dhina is reported to be actively involved in the shipment of arms to terrorist organizations," the filing stated.

Mahdi, 34, denied any connection to terrorism and told the Associated Press in an interview from his Montreal home that he had never heard of the Algerian Islamic League.

Dhina, reached by the Associated Press in Geneva, said he founded the Algerian Islamic League as a cultural association but that it has not existed for five or six years. He said he does not know either Garofalo or Chamchi and described the allegations as "surreal."

Prosecutors also alleged that a phone number "connected with Garofalo" was called several times in January 1992 from a telephone number associated with a person under investigation for the theft and sale of dynamite stolen in Ontario. "The government is in the process of procuring the investigative file linked with that investigation from Canadian law enforcement," the filing stated.

Investigators are still piecing together Garofalo's background. The U.S. Customs Service learned from Canadian immigration officials that Garofalo's husband, Yasim Rachek, is an Algerian national who was deported from Canada in 1993 after attempting to enter the country illegally using a false French passport. Rachek lives in Italy.

Garofalo was born in Canada, lives on welfare and in pretrial papers listed her only asset as $8 in a checking account. "She reports that she travels all over the world, and has taken vacations in Europe, Africa and the Middle East. Garofalo claims that this travel, and her other living expenses, are paid for by a wealthy mother," prosecutors told the judge in their motion.

Less is known about Chamchi, Garofalo's passenger. According to Canadian immigration officials cited in the court filing, "he entered Canada as a stowaway on a ship in June of 1997." In pretrial papers, Chamchi said he was employed full-time, but he could not remember the name of the company for which he worked.