New Jersey's Muslim leaders are unhappy with the state's review of spying within their communities by New York City police.

The state attorney general spoke with the leaders Thursday. He says he determined the New York Police Department's surveillance of Muslim businesses, mosques, student groups and others had violated no state laws.

The Muslim leaders say they were told every single instance of surveillance in New Jersey was justified by a lead. But they say no specifics were provided and they feel insulted.

Mohamed El Filali, head of an Islamic center, asked why there had been no arrests if the NYPD had so many legitimate leads.

A spokesman for New York Mayor Michael Bloomberg says the review confirmed what the city has been saying _ that all the police operations were conducted legally.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

New York City police did not violate New Jersey laws when they conducted surveillance of Muslim businesses, mosques and student groups, Gov. Chris Christie's administration said Thursday following a three-month review, rejecting demands by Muslim leaders for a formal investigation and a clampdown on cross-border police operations.

The findings by Attorney General Jeffrey S. Chiesa, a Christie appointee asked by the governor to look into the spying, mean New Jersey Muslims have no state recourse to stop the New York Police Department from infiltrating student groups, videotaping mosque-goers or collecting their license plate numbers as they pray.

Such operations were part of a widespread NYPD program to collect intelligence on Muslim communities both inside New York and beyond. Undercover officers and informants eavesdropped in Muslim cafes and monitored sermons, even when there was no evidence of a crime. The result was that many innocent business owners, students and others were cataloged in police files.

The interstate surveillance efforts, revealed by The Associated Press earlier this year, angered many Muslims and New Jersey officials. Some, like Newark Mayor Cory Booker and the state's top FBI official, criticized the tactics. Others, like Christie, focused more on the fact that the NYPD didn't tell New Jersey exactly what it was up to.

In response, Chiesa launched what he described as a fact-finding review. That review concluded that the NYPD's operations violated no state laws, either civil or criminal.

Further, authorities found that New Jersey has no laws barring outside law enforcement agencies from secretly conducting operations in the state, representatives of the attorney general's office told The Associated Press. However, New York police have agreed to meet with New Jersey law enforcement regularly to discuss counterterrorism intelligence and operations, the attorney general said.

The attorney general planned to explain those conclusions to Muslim leaders Thursday. Chiesa is the governor's former chief counsel, led Christie's transition team when he was elected governor and worked with him when he was U.S. attorney.

"We remain committed to striking the appropriate balance of ensuring the safety of our citizens through vigilance in fighting terrorism, while not undermining the public's confidence in how we approach that mission," Chiesa said in a statement.

Christie was not at the meetings.

He was making a visit Thursday afternoon to Atlantic City. Asked about the findings, he said: "I have every confidence in Attorney General Chiesa. If that's what he determined, it's good enough for me."

Many Muslim leaders have said they would accept nothing less than a formal investigation into the NYPD.

The NYPD has long maintained that its operations were lawful and necessary to keep the city safe. New York Mayor Michael Bloomberg says the NYPD can gather intelligence anywhere in the country it wants and is not required to tell local authorities. NYPD lawyers say they are not bound by jurisdictional lines because they are just collecting intelligence, not making arrests or otherwise acting as police.

Though civil rights groups argue that the tactics violate federal law, the Justice Department has been reluctant to even discuss the issue. Attorney General Eric Holder has said he is "disturbed" by what he has read about the NYPD. But nearly a year after members of Congress called for an investigation, the Justice Department says it is still reviewing the letters and hasn't decided whether to look into the matter.

The Justice Department often investigates police departments suspected of racial profiling but typically focuses on arrests or traffic stops, never in relation to national security.

The Obama administration has called for greater community and police outreach to Muslim neighborhoods. But the administration's grants heavily finance the NYPD, the largest and most politically powerful police department in the country.

That has put the administration in an awkward political position. Just recently, for instance, John Brennan, President Barack Obama's counterterrorism adviser said he had "full confidence that the NYPD is doing things consistent with the law." When questioned by Muslim leaders, however, the White House issued an anonymous statement saying Brennan was not talking about the NYPD's surveillance.

At the state level, the attorney general said a directive he issued requires all New Jersey law enforcement agencies to notify the New Jersey State Police Counter-Terrorism Bureau and the Office of Homeland Security and Preparedness if they hear of outside departments working in New Jersey. The state agencies will then coordinate with the Joint Terrorism Task Force, of which the NYPD is a member.

Chiesa said he is also establishing a Muslim outreach committee.

Muslim leaders had warned that they would take other steps if the attorney general did not agree to undertake a full investigation of the conduct of the NYPD in New Jersey.

Aref Assaf of the Paterson-based American Arab Forum said prior to Thursday's meeting that the options would include boycotting any cooperation with law enforcement to filing a class-action lawsuit modeled on a current "stop-and-frisk" lawsuit against the NYPD in New York.

The attorney general's office said the review is ongoing, and involved gathering information from more than 50 individuals in law enforcement in New Jersey, New York and other states, as well as from civilians within the Muslim and other communities in New Jersey.

Christie, who was the U.S. attorney for the state at the time of the New Jersey surveillance, said when the surveillance became public that he didn't recall ever being briefed on NYPD operations. He was one of several state and federal officials who had earlier criticized the NYPD's conduct in New Jersey, accusing the agency of acting like "masters of the universe" by sending agents into his state.

New Jersey's FBI chief, Michael Ward, also has been critical of the NYPD for not conducting the operations within the umbrella off the Joint Terrorism Task Force, to which the NYPD belongs. He said the actions undermined the bureau's own efforts by sowing distrust of authorities among Muslims and weakened national security.

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Associated Press writers Matt Apuzzo in Washington and Wayne Parry in Atlantic City contributed to this report.

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