ISLAMABAD -- The United States has offered a $10 million bounty for the founder of the Pakistani militant group blamed for the 2008 attacks in the Indian city of Mumbai that killed 166 people, a move that could complicate U.S.-Pakistan relations at a tense time.
Hafiz Mohammad Saeed founded Lashkar-e-Taiba in the 1980s, allegedly with Pakistani support to pressure archenemy India over the disputed territory of Kashmir. Pakistan banned the group in 2002 under pressure from the U.S., but it operates with relative freedom -- even doing charity work using government money.
The U.S. has designated Lashkar-e-Taiba and its social welfare wing Jamaat-ud-Dawwa as foreign terrorist organizations. Intelligence officials and terrorism experts say the group has expanded its focus beyond India and has plotted attacks in Europe and Australia. Some have called it "the next al-Qaida" and fear it could set its sights on the U.S.
Saeed operates openly in Pakistan, giving public speeches and appearing on TV talk shows. The U.S. also offered up to $2 million for Lashkar-e-Taiba's deputy leader, Hafiz Abdul Rahman Makki, who is also Saeed's brother-in-law.
The reward for "information leading to the arrest and conviction" of Saeed is one of the highest offered by the U.S. and is equal to the amount for Taliban chief Mullah Omar. Only Ayman al-Zawahri, who succeeded Osama bin Laden as al-Qaida chief, fetches a higher bounty at $25 million.
The bounties were posted on the U.S. State Department Rewards for Justice website late Monday.
The website describes Saeed as a former professor of Arabic and engineering who heads an organization "dedicated to installing Islamist rule over parts of India and Pakistan." It also noted that six of the people killed in the 2008 Mumbai attacks were American citizens.
A Pakistani-American, David Coleman Headley, has pleaded guilty in a U.S. court to helping Lashkar-e-Taiba plan the Mumbai attacks.
Indian External Affairs Minister S.M. Krishna welcomed the U.S. announcement, saying it would signal to Lashkar-e-Taiba and its patrons that the international community remains united in fighting terrorism.
"The decision reflects the commitment of India and the United States to bring the perpetrators of the Mumbai terrorist attack to justice and continuing efforts to combat terrorism," he said.
The move comes at a particularly tense time in the troubled relationship with the U.S. and Pakistan. Pakistan's parliament is currently debating a revised framework for relations with the U.S. in the wake of American airstrikes in November that killed 24 Pakistani soldiers at two posts along the Afghan border.
Pakistan retaliated by kicking the U.S. out of a base used by American drones and closing its border crossings to supplies meant for NATO troops in Afghanistan.
The U.S. hopes the parliamentary debate will result in Pakistan reopening the supply lines. The closure has been a headache for the U.S. because it has had to spend more money sending supplies through an alternate route that runs through Central Asia. It also needs the route to withdraw equipment as it seeks to pull most of its combat forces out of Afghanistan by the end of 2014.
But it's unclear whether the U.S. will be willing to meet Pakistan's demands, which include higher transit fees for the supplies and an unconditional apology for the airstrikes, which the U.S. has said were an accident. Pakistan has also demanded an end to American drone strikes in Pakistan, but it's unclear if that will be tied to the reopening of the supply line.
The bounty on Saeed could complicate the process even further. Pakistan could see the U.S. announcement as a provocation. Islamabad will likely be reluctant to act given the government's historical links with Saeed and the political danger of being seen as doing Washington's bidding in a country where anti-American sentiment is rampant.
Saeed has been particularly high-profile over the last few months as part of the leadership of the Difa-e-Pakistan, or Defense of Pakistan Council, which has held a series of large demonstrations opposing the resumption of NATO supplies and reconciliation with India.
A close aide to Saeed, Yahya Mujahid, claimed the U.S. decision to announce a bounty was driven by these activities. "It is another attack on Islam and Muslims by the Americans," he said.
Lashkar-e-Taiba, which means Army of the Pure, belongs to the Salafi movement, an ultraconservative branch of Islam similar to the Wahabi sect -- the main Islamic branch in Saudi Arabia from which al-Qaida partly emerged. Lashkar-e-Taiba and al-Qaida operate separately but have been known to help each other when their paths intersect.
Analysts and terrorism experts agree that Pakistan's intelligence agency, known as the ISI, is still able to control Lashkar-e-Taiba, though the ISI denies it.
After it was banned by the Pakistani government in 2002, Lashkar-e-Taiba began operating under the name of Jamaat-ud-Dawwa, its social welfare wing.
It carries out charitable works in scores of villages -- partially funded by the Punjab provincial government. It has used national disasters, such the devastating floods in 2010, as recruitment and fundraising opportunities.
Pakistan's tolerance of Lashkar-e-Taiba is rooted in its fear of neighboring India, with which it has fought three wars in 65 years. Analysts believe Pakistan still sees the group as useful in pressuring India, especially over Kashmir.
There are also fears about what would happen if Pakistan tried to crack down on the group, as it did with some other groups under U.S. pressure in the wake of the Sept. 11, 2001 attacks. It lost control of some who turned against their former patrons, and found itself also dealing with homegrown extremists. Lashkar-e-Taiba has so far refused to turn against the government and attack inside Pakistan.
Associated Press writer Nirmala George contributed to this report from New Delhi.