World News - With $10 million bounty on his head, Pakistan militant ...

Aamir Qureshi / AFP - Getty Images

Hafiz Saeed, who is suspected of masterminding the attack on India's financial capital Mumbai in 2008 that killed 166 people, leaves a news conference in Rawalpindi, Pakistan, on Wednesday. Released from house arrest in 2009, Saeed is a free man.

By msnbc.com news services

RAWALPINDI, Pakistan?-- ?Who wants to be a millionaire? In Pakistan, all you have to do is give the United States information leading to the arrest or conviction of Hafiz Saeed -- an Islamist leader whose whereabouts are usually not a mystery. Saeed is suspected of masterminding the attack on India's financial capital Mumbai in 2008 that killed 166 people, including six Americans.

U.S. authorities placed a bounty on Monday of up to $10 million on Saeed, but on Wednesday he was openly wandering across Pakistan's military garrison town of Rawalpindi, hanging out with some of the most anti-American characters in the country.

"This is a laughable, absurd announcement. Here I am in front of everyone, not hiding in a cave," Saeed told a news conference at a hotel -- a mere 40-minute drive from the U.S. Embassy in Islamabad and just across from the headquarters of Pakistan's army, recipient of billions of dollars in U.S. aid.

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Saeed operates openly in Pakistan from his base in the eastern city of Lahore and travels widely, giving public speeches and appearing on TV talk shows. He has been one of the leading figures of the Difa-e-Pakistan, or Defense of Pakistan Council, which has held a series of large demonstrations in recent months against the U.S. and India.

"Now that he has a price on his head, for this money anyone is willing to do anything," said Javed, a 55-year-old government employee who declined to give his full name. "Once people see the money there is no saving him, only God can save him."

In Washington, U.S. officials said the decision to offer the $10 million reward under the State Department's longstanding "Rewards for Justice" program came after months of discussions among U.S. agencies involved in counter-terrorism.

Khuram Parvez / Reuters

Images of daily life, political pursuits, religious rites and deadly violence.

The $10 million figure signifies major U.S. interest in Saeed. Only three other militants, including Taliban leader Mullah Omar, fetch that high a bounty. There is a $25 million bounty on the head of al-Qaida leader Ayman al-Zawahiri.

At the same time it targeted Saeed, the U.S. government also offered a smaller reward -- $2 million -- for Hafiz Abdul Rahman Makki, whom it said was the second in command of the militant group founded by Saeed, Lashkar-e-Taiba (LeT).

As with many militants sought by the United States -- and unlike Saeed -- Makki's whereabouts are unknown to U.S. authorities. The bounty would be paid for information leading to his location.?Makki?is Saeed's brother-in-law.

Pakistan banned LeT 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 as foreign terrorist organizations. Intelligence officials and terrorism experts say LeT 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.

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The announcement of a reward for Saeed comes at a time of heightened tension between the United States and Pakistan and is likely to increase pressure on Pakistan to take action against the former Arabic scholar. It is also likely to please India, the target of numerous LeT attacks.

'US is acting like it's Clint Eastwood'
Released from house arrest in 2009, Saeed is a free man in Pakistan, a strategic U.S. ally and one of the world's most unstable countries. The United States, which sees Saeed as a major security threat, is hoping the bounty will trigger a stampede of Pakistanis who come forward with information that could lead to his arrest and conviction. Pakistani officials say Saeed and Jamaat-ud-Dawwa have been cleared by Pakistani courts.

Pakistan wants to dramatically overhaul the rules of engagement with the U.S. in an attempt to clarify relations that have deteriorated dramatically since the Osama bin Laden raid last year. In an exclusive Andrea Mitchell Reports interview, Pakistani Foreign Minister Hina Rabbani Khar explains the country's response if the U.S. refuses to ends its drone attacks.

They say they don't understand what all the fuss is about and complain the Americans are acting like cowboys. "The United States is acting like it's Clint Eastwood," said a senior security official, speaking on condition of anonymity. "It's as if they just want to ride a horse into Pakistan and just drag people like him away."

Another security official nodded in agreement while a television repeatedly showed footage of Saeed. "What would happen if we put a bounty on President (Barack) Obama's head because American drone strikes sometimes kill Pakistani civilians?" The drone strikes, which the United States regards as a highly effective and accurate weapon against militants, are deeply unpopular in Pakistan.

Saeed, a short, bearded man with a quiet but intense demeanor and henna-dyed hair, has turned the drone strikes and other explosive issues like the presence of Western troops in Afghanistan into a rallying cry against the United States. That has won him support on Pakistan's streets.

"He wants the drone strikes to stop. He wants the bloodshed in Afghanistan to end," said a senior police official in Pakistan's commercial capital Karachi. "Hafiz Saeed isn't saying anything wrong. In fact, he's a patriot."

A Pakistani court has sentenced Osama bin Laden's three wives, and two of his daughters to 45 days in prison, for violating immigration laws. His youngest wife, who was with bin Laden when U.S. forces raided his compound last May, has provided the Pakistani Intelligence with a detailed account of the al-Qaida mastermind's life on the run since September 11, 2001. NBC's Amna Nawaz reports.

Some Pakistanis could not understand why the bounty was issued while Saeed is in plain view. His capture may ultimately depend on cooperation from Pakistan, often accused by the West of supporting militant groups. Pakistan denies the charges.

"It is unlikely that anything will come out of this. You put bounties on people who are hiding, not those walking around free," said businessman Haris Chaudhry. "It's ridiculous."

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Saeed, 61, founded LeT in the 1990s and it became one of South Asia's best-funded militant organizations. He abandoned its leadership after India accused it of being behind an attack on the Indian parliament in December 2001. India has long called for Saeed's capture, blaming the LeT for the Mumbai carnage. He denies any wrongdoing and links to militants.

Lashkar-e-Taiba, which means Army of the Pure, belongs to the Salafi movement, an ultraconservative branch of Islam similar to the Wahabi sect ? the main Islamic branch in Saudi Arabia from which al-Qaida partly emerged. Lashkar-e-Taiba and al-Qaida operate separately but have been known to help each other when their paths intersect

Jihadists are entrenched in Kashmir and they're seeking to incite war between nuclear-armed Pakistan and India, author Dilip Hiro tells NBC's Carol Grisanti.

Saeed, a?former professor of Islamic studies, seemed unfazed by the bounty. As stern-faced bodyguards with AK-47 assault rifles kept a close watch, he ridiculed the Americans during his press conference at The Flashman's Hotel.

He was flanked by some of Pakistan's most hard line Islamists who all belong to an alliance of groups campaigning for a break in ties with the United States and India. They included Sami-ul-Haq, a cleric best known as "the father of the Taliban" for his historical ties to the Afghan militant movement. Another member, Hamid Gul, a former head of Pakistan's intelligence service, was also present. On the edge of Islamabad, a Pakistani intelligence officer who has handled militant groups for decades, shook his head as he pondered the U.S. reward.

Osama bin Laden's brother-in-law, Zakaria al-Sadah, spoke to NBC News in Islamabad in his first interview with an American television network. He said he is concerned for his sister, who was shot in the raid that killed the al-Qaida leader, and frustrated she and her children have been in custody ever since. NBC's Amna Nawaz reports.??

"If the guy who decided to do this could get a job in the State Department, then I could be the president of the United States," the chuckling operative, wearing a suit and puffing on a cigarette, said.

"God bless America."

Reuters and The Associated Press contributed to this report.

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