The news of the bounty broke on Monday after a meeting between US Under-Secretary for Political Affairs Wendy Sherman and Indian Foreign Secretary Ranjan Mathai in New Delhi. Shortly afterwards Washington announced the details on its Rewards for Justice website saying the US Administration would pay 10 million US dollars (7.51 million euros) for "information leading to the arrest and conviction of Hafiz Mohammad Saeed."

This means that Saeed now has the same price on his head as the founder of the Taliban, Mullah Omar, also believed to be in Pakistan. Only Ayman al-Zawahri, Osama bin Laden's successor as al Qaeda chief, fetches a higher bounty at 25 million US dollars.

Saeed founded the Pakistani militant group Lashkar-e-Taiba in the 1980s and is suspected by India and the US of being the mastermind behind the November 2008 terrorist attacks on the Indian financial metropolis of Mumbai. A Pakistani-American, David Coleman Headley, pleaded guilty in a US court to helping Lashkar-e-Taiba plan the Mumbai attacks. The attack - carried out by 10 gunmen armed with automatic weapons - left at least 166 people dead including six US citizens.

Deep divisions

India was quick to welcome the US move. Foreign Minister SM Krishna told Reuters on Tuesday that the "bounty reflects the commitment of India and the US to bring the perpetrators of the Mumbai terrorist attack justice and continuing efforts to combat terrorism."

However, reaction in Pakistan was hostile and defiant. Relations between the two countries have been at their lowest ebb since US forces killed 24 Pakistani troops in an incident on the border to Afghanistan late last year. The announcement of the bounty appears to have stalled attempts to mend the fences through diplomatic means. Tasnim Noorani, a former interior secretary, told DW's correspondent in Islamabad that attempts to patch up the damage in bilateral affairs had failed: "US-Pakistani ties are at their lowest level. These relations were being portrayed as improving through diplomatic channels but now the realities are being exposed."

According to the Indian investigation, the gunmen who perpetrated the Mumbai attacks arrived in the city a sea voyage from Pakistan. Telephone calls made by the gunmen were traced back to Pakistan. The sole surviving terrorist Kasab has been sentenced to death and is awaiting execution. However, despite the fact that the Pakistani authorities briefly detained Saeed, he has not been convicted of involvement in the attacks because of what Pakistani courts regard as a lack of evidence.

Recently a Pakistani delegation visited Mumbai to examine court documents and evidence gathered by the Mumbai police. However, they claimed they had not been allowed access to key papers and witnesses.

Terrorism with a charitable face

Saeed also heads the charitable organization known as Jamaat-ud-Dawa, which has provided relief aid during natural disasters in Pakistan in recent years and has used government money in the process. Yahya Mujahid, a spokesman for the organization, responded to the news of the bounty by describing Hafiz Saeed as a "national and religious leader," who was not hiding put taking part in public life. He told DW the move was "an attack on Islam by the US."

Western intelligence agencies regard this organization as a mere front for Lashkar-e-Taiba and also believe that it enjoys close links with the Pakistani intelligence service ISI which - they allege - financed Lashkar-e-Taiba's insurgents in disputed Kashmir. The US has blacklisted both Lashkar-e-Taiba and Jamaat-ud-Dawa. More recently Western intelligence agencies have alleged that Lashkar-e-Taiba is as dangerous as al Qaeda and has been plotting terrorist attacks not only in India but also in the US and Europe. For its part Pakistan banned Lashkar-e-Taiba in 2002, but the group has continued to operate freely in the country.

Author: Grahame Lucas
Editor: Sarah Berning