Police killed a Pakistani and arrested another in a shootout Tuesday that authorities said foiled a terrorist attack in India's financial capital a month after a series of train bombings that left more than 200 people dead.

Mohammad Riyaz Nawabuddin was arrested by a police anti-terrorism squad after detonators, a pistol and ammunition rounds were recovered from the car he was driving, police investigator K.P. Raghuvanshi said.

Raghuvanshi said the squad was acting on information that terrorists were in the city and planning another strike.

Nawabuddin led officers to an abandoned building where he and his associate had been hiding in recent days, said police chief A.N. Roy.

A second Pakistani national, identified as Mohammad Ali Osama, was killed in the building after he opened fire on police who had ordered him to surrender. An automatic rifle and ammunition was recovered from him, Roy said.

Raghuvanshi said the arrest and shootout prevented another terrorist attack.

Officials did not specify whether more suspects were at large, but said police have been on alert since the bombings.

"We are trying to get an elaborate security umbrella in place," Roy said. "Based on intelligence inputs and information we have been looking for people and that's how our team nabbed Nawabuddin."

Nawabuddin, 21, was taken into custody and he faces charges of planning to carry out a terrorist act and possession of arms, ammunition and explosives.

Police inspector S. Deshmukh said a railway timetable and suburban train tickets were found on Nawabuddin. Police "learned that Pakistan-trained terrorists had entered Bombay, have arms and explosives and have vehicles," Deshmukh told a judge.

If Nawabuddin is found guilty, he faces life in prison.

Police are investigating whether the two men also had a role in the July 11 bombings of Bombay's rail network that killed at least 207 people and injured more than 700 others.

Authorities have said they believe the Pakistan-based Muslim militant group Lashkar-e-Tayyaba was behind the blasts and was assisted by members of the Students Islamic Movement of India, a banned Islamic group. Pakistan has denied any involvement.

Police have arrested more than 10 people since the bombings and detained hundreds of others for interrogation.