WEST CHESTER, Pa. -- Nick Berg, the Philadelphia-area man beheaded in Iraq by militants with links to al-Qaida, was investigated by U.S. authorities for a possible connection to terrorists, Attorney General John Ashcroft said Friday.

NICK BERG Nick Berg In Captivity Slideshow: Militants Hold Berg Video: Father Urged Him Not To Go

No terrorist link was found, the attorney general said in a Justice Department news conference.

Ashcroft said Berg was investigated by the FBI in 2002 after authorities learned that an e-mail address traced to him had apparently been used by someone with ties to terrorism suspect Zacarias Moussaoui while Berg was briefly an engineering student at the University of Oklahoma in 1999.

Moussaoui is in U.S. custody, awaiting trial on charges related to the attacks of Sept. 11, 2001. He was arrested in August 2001 at a flight school outside Minneapolis after employees reported suspicious requests for instruction.

"The suggestion that Mr. Berg was in some way involved in terrorist activity, or may have been linked in some way to terrorist activity, is a suggestion that we do not have any ability to support and we do not believe is a valid one," Ashcroft said.

Ashcroft told reporters there is no evidence that Berg knew Moussaoui or any of Moussaoui's contacts in Oklahoma, where the terrorism suspect first sought flight training in Norman.

The 26-year-old Berg, an independent businessman whose family says he went to Iraq to help the war-torn country rebuild, was decapitated on camera by Islamic militants who broadcast the grisly act on a Web site. U.S. authorities believe the killer is Abu Musab al-Zarqawi, a Jordanian militant said to be a top ally of Osama bin Laden.

On the tape, dubbed on the Web site as "Sheik Abu Musab al-Zarqawi slaughters an American infidel with his own hands," the killer reads a statement saying the act is in revenge for the abuse of Iraqi prisoners by American guards and interrogators.

Berg Buried In Pa. Ceremony

Meanwhile, in his hometown of West Chester, Pa., family and friends remembered Berg at a memorial service.

His family asked that only those who knew Berg come to Friday's memorial and burial. Police turned away curiosity seekers and others who tried to attend the gathering. Those who did attend were screened with metal detectors.

The media also was kept out of the service.

Berg was laid to rest Friday morning in a family plot in Jenkintown, Pa.

Nick Berg's father, Michael Berg, blames the Bush administration for his son's death.

"Nick died for the sins of the Bush administration," Michael Berg said Wednesday in an interview with The Associated Press.

The Bergs said they want to know if the government had received an offer to trade Iraqi prisoners for their son. On the videotape of his death, Berg's killers say a trade offer was rejected, but U.S. officials have said they knew of no such offer.

Still, it is American policy not to negotiate such offers with terrorists.

Government Disputes E-Mail

The State Department says an e-mail from a consular officer in Iraq that said Berg had been in U.S. custody was based on erroneous information.

Spokeswoman Kelly Shannon said the Coalition Provisional Authority in Iraq had sent the incorrect information to the diplomat.

The diplomat sent Berg's family an e-mail saying he had been in U.S. custody. But officials now insist he had been held by Iraqi police.

Berg wrote his parents after his release that federal agents had questioned him about whether he had ever built a pipe bomb or had been in Iran.

His family said being delayed by the detention prevented him from leaving the country sooner. U.S. authorities said that when Berg was being set free, he refused their offer for "safe passage" out of Iraq.