Third Mumbai Terrorist Suspect Placed Under House Arrest; Charity a Front Group For Terrorist Organization

A senior U.S. defense official says another Mumbai terrorist suspect has been placed under house arrest while new details have emerged on Zarrar Shah, the alleged leader of Lashkar-e-Taiban, FOX News has learned.

Pakistan is not confirming the house arrest of Maulana Masood Azhar, the founder of Jaish-e-Mohammed, a group involved with carrying out terror attacks. Jaish-e-Mohammed is separate from Lashkar-e-Taiba, the banned Islamic militant group that India says was responsible for the Mumbai attack.

Intelligence sources tell FOX that Zarrar Shah — Lashkar's reported communications chief — was on the phone with the gunmen at the time of the attack, watching it unfold in real-time on television and directed their fire and movement based on what he was seeing. Shah was detained Wednesday by Pakistani authorities.

Officials also told FOX that the U.S. did warn India, providing very specific intelligence ahead of the Mumbai attacks regarding sites targeted by terrorists.

The other alleged Mumbai mastermind, Zaki-ur-Rehman Lakhvi, was detained during a raid Sunday in Pakistan's portion of Kashmir, a predominantly Muslim region in the Himalayas that is claimed by both nations and the focus of two wars since 1947.

Also on Wednesday, a U.N. Security Council panel declared a Pakistan-based charity a front group for the terrorist organization blamed in the attacks .

In a move sought by India and the United States, the panel said the charity Jamaat-ud-Dawa was a front for the Pakistani militant group Lashkar-e-Taiba and subject to U.N. sanctions on terrorist organizations.

It also approved the designation of four suspected plotters of the Mumbai attack as terrorists subject to sanctions.

They include Zaki-ur-Rehman Lakhvi, Lashkar's operations chief, whose arrest was announced Wednesday. The others are Muhammad Saeed, the group's leader; Haji Muhammad Ashraf, its chief of finance; and Mahmoud Mohammad Ahmed Bahaziq, a financier with the group.

Among the sanctions imposed on charity Jamaat-ud-Dawa and the four individuals by the Security Council's al-Qaida and Taliban Sanctions Committee were an asset freeze, travel ban and arms embargo on the individuals.

Since 2005 that sanctions committee — a powerful tool of the U.N.'s powerhouse 15-nation Security Council — has considered Lashkar to be a terrorist organization affiliated with al-Qaida. The United States and European Union also have sanctioned the group.

By accepting that Jamaat-ud-Dawa is essentially an alias for the Lashkar group, the U.N. panel has significantly added to India's pressure for Pakistan's civilian government to prove that it is cracking down on militant groups and pursuing extremists blamed for last month's siege of India's commercial capital.

Lakhvi was detained during a raid Sunday in Pakistan's portion of Kashmir, the mountainous region claimed by both nations that has been a focus of two of their three wars since 1947. Prime Minister Yousuf Raza Gilani said Wednesday that Pakistani authorities also had detained Zarrar Shah, an alleged leader of Lashkar-e-Taiba.

Pakistani officials, however, say India has not shared evidence from its investigation of the attack, in another manifestation of the deep mistrust between the nuclear-armed neighbors that the U.S. has been struggling to prevent from becoming a bigger crisis.

Jamaat-ud-Dawa emerged after Pakistan's government banned Lashkar in 2002, following U.S. pressure. The group, which has denied any links to Lashkar, runs a chain of schools and medical clinics and has helped survivors of two deadly earthquakes in recent years.

The charity's leader, Hafiz Mohammed Saeed, repeated his group's denial of links to Lashkar. "No Lashkar-e-Taiba man is in Jamaat-ud-Dawa and I have never been a chief of Lashkar-e-Taiba," he told Pakistan's Geo television Wednesday.

American authorities, however, believe that these "high-priority designations ... will limit the ability of known terrorists to travel, acquire weapons, plan, carry out, or raise funds for new terrorist attacks," the U.S. State Department said Wednesday.

In other moves, the U.N. sanctions panel described a number of trusts and foundations as aliases for the al-Rashid and al-Akhtar trusts, which have raised funds for the Lashkar group.

According to the panel, the al-Rashid Trust can be equated with the al-Amin Welfare Trust, al-Amin Trust, al-Ameen Trust, al-Ameen Trust, al-Madina Trust and al-Madina Trust.

The al-Akhtar Trust aliases, the panel said, are Pakistan Relief Foundation, Pakistani Relief Foundation, Azmat-e-Pakistan Trust and Azmat Pakistan Trust.

India had pressed the Security Council for sanctions against the charity on Tuesday, contending along with the U.S. that Jamaat-ud-Dawa is a front for Lashkar.

The Lashkar group is widely believed to have been created with the help of Pakistan's military and intelligence services as a proxy fighting force in India's part of Kashmir, where Muslim separatists have engaged in a long insurgency.

E. Ahamed, India's junior foreign minister, urged the Security Council to ban Jamaat-ud-Dawa as "a terrorist outfit" and called on Pakistan during a council debate on counterterrorism Tuesday to take "urgent steps to stop their functioning."

"The Jamaat-ud-Dawa and other such organizations need to be proscribed internationally and effective sanctions imposed against them," Ahamed said. "Their country of origin needs to take urgent steps to stop their functioning."

Pakistani Ambassador Abdullah Hussain Haroon responded that his country's intelligence and police agencies already were investigating Jamaat-ud-Dawa and other groups and may impose punitive measures, including a freeze on their financial assets.

"A plan is being prepared to ensure effective government supervision, as required by this body and others, of the various welfare organizations," he said.

Pakistan has condemned the Mumbai attack and shares India's pain, Haroon said, adding that both nations must work together and be cautious about rushing to judgment.

"Let's recommend to each other to stop all negative campaigns against each other," he said.

The Associated Press contributed to this report.