Pakistan pushed back against the U.S. in its first official response to the bounty, saying Washington needed to provide "concrete evidence" if it wants the government to act against Saeed.
Analysts have said Pakistan is unlikely to arrest Saeed because of his alleged links with the country's intelligence agency and the political danger of doing Washington's bidding in a country where anti-American sentiment is rampant.
Saeed has used his high-profile status in recent months to lead a protest movement against U.S. drone strikes and the resumption of NATO supplies for troops in Afghanistan sent through Pakistan. Islamabad closed its borders to the supplies in November in retaliation for American airstrikes that accidentally killed 24 Pakistani soldiers.
Hours before Saeed spoke, U.S. Deputy Secretary of State Thomas Nides met Pakistani Foreign Minister Hina Rabbani Khar in the nearby capital, Islamabad, for talks about rebuilding the two nation's relationship. In a brief statement, Nides did not mention the bounty offer but reaffirmed America's commitment to "work through" the challenges bedeviling ties.
The U.S. said Tuesday it issued the bounty for information leading to Saeed's arrest and conviction in response to his increasingly "brazen" appearances. It also offered up to $2 million for Lashkar-e-Taiba's deputy leader, Hafiz Abdul Rahman Makki, who is Saeed's brother-in-law.
The rewards marked a shift in the long-standing U.S. calculation that going after the leadership of an organization used as a proxy by the Pakistani military against archenemy India would cause too much friction with the Pakistani government.
This shift has occurred as the U.S.-Pakistani relationship has steadily deteriorated over the last year, and as the perception of Lashkar-e-Taiba's potential threat to the West has increased.
Pakistani Foreign Office spokesman Abdul Basit said any U.S. claims against Saeed must be able to stand up in court.
"Pakistan would prefer to receive concrete evidence to proceed legally rather than to be engaging in a public discussion on this issue," Basit said in a statement sent to reporters.
The U.S. may be hoping the reward money for Saeed will force Pakistan to curb his activities, even if it isn't willing to arrest him. But the news conference he called at a hotel in the garrison city of Rawalpindi on Wednesday was an indication that is unlikely, and the bounty may even help him by boosting his visibility.
At the hotel, located near the Pakistani army's main base and only a half hour drive from the U.S. Embassy in Islamabad, Saeed was flanked by more than a dozen right-wing politicians and hardline Islamists who make up the leadership of the Difa-e-Pakistan, or Defense of Pakistan, Council. The group has held a series of large demonstrations against the U.S. and India in recent months.
Some in the media have speculated the movement has the tacit support of the Pakistani military, possibly to put pressure on Washington.
"I want to tell America we will continue our peaceful struggle," said Saeed. "Life and death is in the hands of God, not in the hands of America."
He denied involvement in the Mumbai attacks and said he had been exonerated by Pakistani courts.
Pakistan kept Saeed under house arrest for several months after the attacks but released him after he challenged his detention in court. It has also resisted Indian demands to do more, saying there isn't sufficient evidence.
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.
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-Qaida" and fear it could set its sights on the U.S.
Associated Press writer Asif Shahzad contributed to this report from Islamabad.