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The bounty offers could complicate U.S. efforts to get the NATO 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.

Mr. Saeed founded Lashkar-e-Taiba in the 1980s, allegedly with ISI support, to pressure India over the disputed territory of Kashmir. The two countries have fought three major wars since they were carved out of the British Empire in 1947, two of them over 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 Qaeda” and fear it could set its sights on the U.S.

Associated Press writer Asif Shahzad contributed to this report from Islamabad.