Hafiz Mohammad Saeed, founder of the Pakistani militant group blamed for the 2008 Mumbai attacks, is now in the same company as fugitive Taliban leader Mohammad Omar in terms of the payoff for his arrest. (Anjum Naveed/AP)

The United States has announced a $10 million bounty for the arrest of Hafiz Mohammad Saeed, founder of the Pakistani group blamed for the 2008 terrorist attacks in Mumbai. The surprise development pleased India but agitated Pakistan — and added yet more strain to the shaky alliance between Washington and Islamabad.

The reward, approved by Secretary of State Hillary Rodham Clinton, appeared to tilt the United States closer to India, the historical antagonist of Pakistan, at a particularly delicate time. The nuclear-armed rivals both have a stake in the future of Afghanistan, where the United States is eager to wind down its decade-long war against the Taliban.

Saeed, 61, founder of the outlawed Lashkar-i-Taiba (Army of the Pious), has long been designated an international terrorist, yet he continues to preach jihad with impunity in Pakistan and operates a large campus for religious training in the eastern city of Lahore.

The $10 million reward — the same sum offered for fugitive Afghan Taliban leader Mohammad Omar — was revealed on the State Department’s Rewards for Justice Web site late Monday. It seemed intended to increase pressure on Pakistan to root out militants on its soil, but U.S. officials described the timing as coincidental.

“There are no coincidences in statecraft,” a senior Pakistani security official responded on Tuesday, speaking on the condition of anonymity because of the sensitivity of the issue.

U.S. and Indian officials allege that Saeed remains free with the tacit permission of the Inter-Services Intelligence directorate, Pakistan’s chief spy agency, which is widely seen as protecting some militant groups even as the nation battles its own virulent insurgency.

Saeed has been put under house arrest periodically, only to be freed by Pakistani courts, which have found insufficient evidence to prove any charges against the Islamic scholar.

“We cannot arrest our nationals on the basis of hearsay and to please India,” another top Pakistani official said, speaking on the condition of anonymity under diplomatic protocols. “If India and the U.S. have any undeniable evidence which can stand the scrutiny of a judicial process, then they should share with us.”

Indian government officials and lawmakers immediately welcomed news of the U.S. bounty and renewed calls to bring to justice those Pakistani radicals who planned the Mumbai gun-and-bomb attacks, which killed 166 people, including six Americans.

On Monday, the United States also announced that it is offering $2 million for the arrest of Saeed’s deputy and brother-in-law, Hafiz Abdul Rahman Makki, who is wanted for allegedly planning the Mumbai massacre.

Saeed, a virulently anti-India and anti-U.S. professor of Islamic studies, now heads Jamaat-ud-Dawa, which he calls a charitable organization. The United States and the United Nations regard the group as a front and have designated it a terrorist organization.

The announcement comes as Pakistani lawmakers are engaged in a furious debate over how much longer Islamabad should continue its counterterrorism alliance with the United States. A parliamentary committee’s report called for an end to CIA drone attacks and demanded a U.S. apology for airstrikes in November that accidentally killed 24 Pakistani soldiers at two border outposts. After the airstrikes, Pakistan shut its border to NATO convoys crossing its territory into Afghanistan.

Saeed’s organization suggested in a statement Tuesday that the bounty is being placed on him because of his opposition to a possible reopening of the military transport route. But in Washington, State Department spokeswoman Victoria Nuland said, “No, it has everything to do with Mumbai and his brazen flouting of the justice system.”

State Department officials said that the reward-setting process took several months of interagency review and that the timing had nothing to do with the negotiations over resetting U.S-Pakistani diplomatic relations.

Many analysts see Jamaat-ud-Dawa — also technically banned in Pakistan — as a reconstituted cover for Lashkar-i-Taiba. Saeed asserts that the groups have no connection.

Saeed’s spokesman Yahya Mujahid characterized the bounties as “an attack on Islam and Muslims,” adding in a statement, “The whole world knows that Hafiz Saeed and [Makki] are not hiding in any caves, and they are rather popular leaders of this great country Pakistan and busy in welfare activities for the people of this country.”

As a social organization, Jamaat-ud-Dawa is influential and well-entrenched in Pakistan, operating schools, hospitals and an ambulance fleet — all of which may make officials reluctant to pursue its leaders.

“There is substantive evidence to suggest that Jamaat-ud-Dawa is gaining ground in Pakistan,” Muhammad Amir Rana, an expert on militancy in Pakistan, wrote last month in the English-language newspaper Dawn.

In India, where Saeed is one of the country’s most-wanted men, officials say he formed Lashkar-i-Taiba to train militants to carry out attacks in the disputed Himalayan state of Kashmir.

In New Delhi, Home Minister P. Chidambaram told reporters that while India has pushed for Saeed’s arrest and interrogation, “Pakistan was in denial and continues to be in denial. ”

The Indian response prompted Pakistani Prime Minister Yousuf Raza Gilani to warn that India should not cheer what he described as external interference in Pakistan.

Lakshmi reported from New Delhi.