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Mohammed Rashed has been sitting behind bars for more than two decades after leaving a bomb under a jetliner seat that exploded on Pan Am Flight 830 from Tokyo to Honolulu on August 11, 1982, killing a Japanese teenager and injuring at least 15 others.
Justice Department spokesman Dean Boyd noted that Rashed, 63, has served about 23 years in prison, including time served in Greek and US jails, over the bomb plot.
The Federal Bureau of Prisons, which published his release date, said he is currently held at the Federal Correctional Institution, McKean, a medium-security jail in western Pennsylvania.
The explosives expert was part of 15 May, an Iraq-based pro-Palestinian group that targeted US and Israeli interests in the 1980s, and he received leniency in his Pan Am sentence for cooperating with international authorities as an informant.
His release could deny the government a key witness should authorities capture Abu Ibrahim (Hussayn Muhammad al-Umari), a Palestinian man believed to have masterminded the attack and who is now on the FBI's most wanted list.
Last year, Australian police reopened inquiries into the 1982 bombing of the Israeli consulate in Sydney and a Jewish club, after finding links to Rashed.
No one was killed but two people were injured in the attacks on the consulate and the Jewish Hakoah sports club in Bondi on December 23, 1982 -- crimes that have gone unsolved for almost 30 years.
Sydney police have long suspected that 15 May, named for the first day of the first Arab-Israeli war in 1948, was linked to the Hakoah club and consulate bombings.