By Simon Cameron-Moore
ISLAMABAD (Reuters) - Pakistani security forces have arrested a suspected planner of last month's militant attack on India's financial capital in Mumbai in a raid on a militant camp in Pakistani Kashmir, sources said on Monday.
The Pakistani government has not revealed any details of Sunday's raid at the camp used by Lashkar-e-Taiba fighters in the hills outside the regional capital Muzaffarabad. But the military confirmed a crackdown had started on banned jihadi groups like Lashkar.
India and the United States have pressed Pakistan to act against militants suspected of being behind the Mumbai attack in which at least 171 people were killed.
There were fears that tensions between nuclear-armed India and Pakistan could rise unless Pakistan cooperated and a four-year-old peace process is already in jeopardy.
Intelligence officials, workers with a charity linked to Lashkar and people living nearby say Zaki-ur-Rehman Lakhvi, a Lashkar operations chief named by India as a suspect, was taken into custody.
"Yes, Lakhvi is among four or five people arrested in a raid yesterday," said an official from the Jamaat-ud-Dawa charity, widely regarded as a front for the militant group.
A former militant who now has close ties to the JuD also said Lakhvi had been arrested, as did one intelligence official.
All of them spoke on condition of anonymity because of the sensitivity of talking about security matters.
Other Pakistani intelligence officers said at least six men were arrested. The military confirmed arrests had been made.
"This is an intelligence-led operation against banned militant outfits and organisations," the military said in a statement. "There have been arrests and investigations are on."
A Lashkar spokesman confirmed the jihadi group was targeted.
"Pakistani forces have attacked our camps in Muzaraffabad under pressure from the U.S. and India," Abdullah Ghaznavi, a spokesman for Lashkar, told Reuters by telephone.
He denied the group was involved in the Mumbai attack.
The surviving gunman captured in Mumbai named Lakhvi and another Lashkar commander, Yusuf Muzammil, as ringleaders in the plot, according to Indian officials.
Indian police said they had identified the nine dead gunmen, and the places they came from in Pakistan.
Rakesh Maria, lead investigator for Mumbai police, said three suspects including one in custody were from Okara district, three from Multan, two from Faisalbad and one from Sialkot. He identified the leader as Ismail Khan, from Dera Ismail Khan.
They were also questioning a man arrested in northern India last February, and investigating if there were any links to homegrown Islamist militant groups.
The man being questioned is an Indian citizen who was caught with maps that highlighted several targets hit in Mumbai.
Pakistan has asked for proof that attackers came from its territory. It says it will cooperate with India in the investigation but relations between the old rivals have become fraught.
For the past two days they have been arguing over the origin of a hoax call to Pakistani President Asif Ali Zardari on November 28 by someone pretending to be the Indian foreign minister.
The aggressive tone taken by the caller resulted in Pakistani forces going on high alert for almost 24 hours.
"I think there's no doubt that Pakistani territory was used, by probably non-state actors," U.S. Secretary of State Condoleezza Rice told CNN on Sunday.
The United States fears a confrontation with India could deflect Pakistan from its " war on terrorism."
In Washington, a White House spokeswoman welcomed the arrests as a positive step by Pakistan.
"What's critically important now is that we continue to work together -- the Indians, the Pakistanis, the United States, and our allies -- to prevent follow-on attacks after the attacks in Mumbai," spokeswoman Dana Perino said.
She said there were no credible signs that follow-on attacks were in the making.
If Lakhvi's arrest is officially confirmed, it will raise the question of what the Pakistani authorities will do with him, and whether it will satisfy India. Zardari has said that anyone arrested in Pakistan will be tried there, too.
The Pakistani military's Inter-Services Intelligence (ISI) agency had ties in the past with Lashkar and other jihadi organisations fighting Indian rule in Kashmir, according to analysts, which could reduce the Pakistani authorities' readiness to be transparent in its handling of the situation.
Laskhar was banned by Pakistan in 2001 after it was blamed, along with Jaish-e-Mohammad, for a raid on the Indian parliament that almost sparked a fourth war between the two countries.
The JuD, however, was just put on a watchlist, although the United States has branded the charity, which has thousands of followers, a terrorist organisation.
The Indian government's measured response so far contrasts with the tough action its public has called for. The government, which faces a general election in 2009, has been criticised for security lapses in the wake of the attacks on Mumbai.
Yet Prime Minister Manmohan Singh's Congress party, despite general distress over rising inflation, looked set to fare far better than expected in elections underway in five states.
The latest crisis with Pakistan has weighed on investor confidence, already sapped by a slowing economy, but the Mumbai stock market rose on Monday thanks to rate cuts and a stimulus package announced at the weekend.
(Additional reporting by Rina Chandran in MUMBAI, Sheikh Mushtaq in SRINAGAR, Abu Arqam Naqash in MUZAFFARABAD, and Zeeshan Haider in Islambad; Editing by Angus MacSwan)