The claim, disputed by British officials, came amid mounting concern and growing evidence that Umar Farouk Abdulmutallab had ties to known Islamic radicals while an undergraduate at University College London between 2005 and 2008.
"The information provided to us is that Umar Farouk joined al-Qa'ida in London," said Rashad al-Alimi, the Yemeni Deputy Prime Minister for Defence and Security.
Alan Johnson, the Home Secretary, told MPs earlier this week that Mr Abdulmutallab was "radicalised after he left this country" but it emerged yesterday that he was noted on UCL files as someone who had contact with known radicals.
Mr al-Alimi also said that in Yemen, the alleged bomber met the radical Muslim cleric Anwar al-Awlaki, the cleric who had e-mail contact with the Muslim US Army psychologist who has been charged with going on a shooting spree that left 13 people dead at Fort Hood in Texas.
White House aides said that Mr Obama was furious over the security breach, and the President said that the incident had revealed "human and systemic" failures across the US intelligence and security community.
In a private meeting with top intelligence officials on Tuesday, he called the bomb plot "a screw-up that could have been disastrous".
Mr Abdulmutallab was allowed to board Northwest Flight 253 in Amsterdam, bound for Detroit, with plastic explosives sewn into his underwear. As the flight, carrying 290 passengers and crew, was circling Detroit in preparation for landing, he injected a priming agent into the explosive. Flames shot into the air but the device failed to explode.
Remarkably, he was allowed on to the flight with a multiple-entry visa to the US, despite having been placed on a no-entry list for Britain.
Mr Abdulmutallab also paid cash and had no checked baggage - further "red flags" that US officials now say should have prevented him from boarding the aircraft.
General James Jones, Mr Obama's National Security Adviser, said before the security report was released that the President "is legitimately and correctly alarmed that things that were available, bits of information that were available, patterns of behaviour that were available, were not acted on".
Mr Obama said on Tuesday that the attempted bombing "was not a failure to collect intelligence, it was a failure to integrate and understand the intelligence we already had". Aides said that Mr Obama had been particularly shocked that such a failure could have occurred despite the reforms put into place after the September 11 attacks.
General Jones said that Americans would feel a "certain shock" when they read the report and discovered the many clues that were not acted upon to stop Mr Abdulmutallab from boarding the flight.
It also emerged that US border security officials learned of Mr Abdulmutallab's possible extremist links once the flight was already in the air and were preparing to question him after he had landed in Detroit.
Mr Abdulmutallab had never been placed on the US no-fly list. Yet the warnings his father delivered to US State Department officials in Nigeria had landed him on a secondary database - a list that contains over half a million people but which does not prohibit them from flying. Border agents cross-referenced his name to the second list after the plane had taken off.
On Wednesday Mr Abdulmutallab was formally charged by a federal grand jury on six counts, including attempted murder and trying to use a weapon of mass destruction aboard a US aircraft, crimes punishable by life imprisonment.