KOLKATA, India (Reuters) - Secretary of State Hillary Clinton said on Monday that Pakistan had not taken enough action against Hafiz Saeed, the Islamist blamed for masterminding the 2008 attack by Pakistan-based gunmen on Mumbai, India's financial capital.
India has repeatedly called on Pakistan to bring Saeed to justice, an issue that has stood in the way of rebuilding relations between the nuclear-armed neighbors since the carnage in Mumbai, where gunmen killed 166 people over three days.
India is furious that Pakistan has not detained Saeed since it handed over evidence against him to Islamabad. On Clinton's authorization, Washington has offered a reward of $10 million for information leading to Saeed's capture.
Saeed founded Lashkar-e-Taiba (LeT) in the 1990s, the militant group whom India blames for the Mumbai attack. He denies any wrongdoing and links to militants.
After the reward was announced, Saeed last month taunted the United States by holding a news conference at a hotel just 40 minutes' drive away from the U.S. embassy in Islamabad, calling the bounty "laughable".
"We're well aware that there has not yet been the steps taken by the Pakistani government to do what both India and the United States have repeatedly requested them they do," Clinton told a town-hall meeting in the Indian city of Kolkata.
"And we're going to keep pushing that point. So it's a way of raising the visibility and pointing out to those who are associated with him that there is a cost for that," she said.
Al QAEDA MASTERMIND IN PAKISTAN?
Although they are allies in the war on militancy, Islamabad and Washington have fallen out over the past year due to a raft of issues, notably American drone strikes on Pakistan from Afghanistan and a unilateral U.S. raid that killed al Qaeda leader Osama bin Laden in Pakistan.
The fact that bin Laden was hiding in a Pakistani garrison town was seized upon by India as proof that Islamabad was dragging its feet on cracking down on militants.
Clinton also said the United States believes al Qaeda leader Ayman al-Zawahiri is somewhere in Pakistan. The Egyptian Zawahiri was bin Laden's lieutenant and the brains behind much of al Qaeda's strategy for many years.
She said Washington was "intent upon going after those who are trying to keep al Qaeda operational and inspirational", and it was in Pakistan's interest to pursue them too.
"It is in their interest, and it is in the interest of their sovereignty, to go after terrorists who are operating on their territory," she said. "And you have to demonstrate that you're not going to cede authority or territory to terrorists."
Ten Pakistani gunmen killed commuters, foreigners and some of India's wealthy business elite in the rampage in Mumbai, which included attacks on two luxury hotels, a Jewish centre and a train station.
"Our position on Hafiz Saeed is clear. We have an independent and active judiciary. If anyone has proof against him, they are welcome to take it to the courts," Moazzam Ali Khan, spokesman for Pakistan's foreign ministry, told Reuters when asked about Clinton's comments.
Clinton is on a three-day visit to India where she will press New Delhi to further cut its oil imports from sanctions-hit Iran, and make the case for India to push a stalled reform of opening its supermarket sector to foreign chains.
Reporting by Andrew Quinn; Additional reporting by Qasim Nauman in ISLAMABAD; Writing by Matthias Williams; Editing by John Chalmers and Jeremy Laurence