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Pakistani militant leader defiant after US slaps $10 million bounty on him

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FILE - Lashkar-e-Taiba founder Hafiz Saeed, attends a ceremony in Islamabad, Pakistan. (AP)

A day after the U.S. slapped a $10 million bounty on one of Pakistan's most notorious militant leaders, he responded by scheduling a press conference near army headquarters Wednesday in a sign of defiance that could anger Washington.

Analysts have said Pakistan is unlikely to arrest Hafiz Mohammad Saeed, founder of the militant group Lashkar-e-Taiba, because of his alleged links with the country's intelligence agency and the political danger of doing Washington's bidding in a country where anti-American sentiment is rampant.

Saeed, 61, has been accused of orchestrating the 2008 attacks in the Indian city of Mumbai that killed 166 people, including six American citizens. But he operates openly in Pakistan, giving public speeches and appearing on TV talk shows.

He has used his high-profile status in recent months to lead a protest movement against U.S. drone strikes and the resumption of NATO supplies for troops in Afghanistan sent through Pakistan. The supplies were suspended in November in retaliation for American airstrikes that accidentally killed 24 Pakistani soldiers.

The U.S. said Tuesday it issued the bounty for information leading to Saeed's arrest and conviction in response to his increasingly "brazen" appearances. It also offered up to $2 million for Lashkar-e-Taiba's deputy leader, Hafiz Abdul Rahman Makki, who is Saeed's brother-in-law.

The rewards marked a shift in the long standing U.S. calculation that going after the leadership of an organization used as a proxy by the Pakistani military would cause too much friction with the Pakistani government.

"I think the sense has been over the past few months that this kind of reward might hasten the justice system," U.S. State Department spokeswoman Victoria Nuland said.

The U.S. could hope the bounty will force Pakistan to curb Saeed's activities, even if it isn't willing to arrest him. But the press conference he called Wednesday in the garrison town of Rawalpindi just outside Islamabad was an early sign it may not have much impact.

He also gave multiple interviews Tuesday in which he denied involvement in the Mumbai attacks and said the U.S. was just trying to prevent him from telling the nation that the government should not allow NATO supplies to resume.

"With the grace of God, we are doing our work in Pakistan openly. It is regrettable that America has no information about me. Such rewards are usually for those who live in caves and mountains," Saeed told The Associated Press in a mosque in Islamabad.

The bounty offers could complicate U.S. efforts to get the supply line reopened. Pakistan's parliament is currently debating a revised framework for ties with the U.S. that Washington hopes will get supplies moving again. But the bounties could be seen by lawmakers and the country's powerful army as a provocation and an attempt to gain favor with India.

U.S. Deputy Secretary of State Thomas Nides was scheduled to hold talks with senior Pakistani officials in Islamabad on Wednesday about the parliamentary review.

The announcement of the rewards also could signal a greater willingness to take a hard line with Pakistan following a year in which the relationship between the two countries severely deteriorated.

That process started last January when a CIA contractor shot and killed two Pakistanis he said were trying to rob him. It continued with the covert unilateral U.S. commando raid that killed Osama bin Laden last May and the deadly U.S. airstrikes against Pakistani troops in November.

Saeed founded Lashkar-e-Taiba in the 1980s allegedly with ISI support to pressure Pakistan's archenemy India. The two countries have fought three major wars since they were carved out of the British empire in 1947, two of them over the disputed territory of Kashmir.

Pakistan banned the group in 2002 under U.S. pressure, but it operates with relative freedom under the name of its social welfare wing Jamaat-ud-Dawwa -- even doing charity work using government money.

The U.S. has designated both groups foreign terrorist organizations. Intelligence officials and terrorism experts say Lashkar-e-Taiba has expanded its focus beyond India in recent years 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.

Pakistan faces a homegrown terrorism problem as well. A bomb planted in a passenger van exploded Wednesday in a violent region near the Afghan border, killing six people, said Iqbal Khan, a government administrator in the Khyber tribal area where the attack occurred.