NEW DELHI—The U.S. has announced a bounty of as much as $10 million for information leading to the arrest and conviction of Hafiz Saeed for his alleged involvement in terrorist attacks, including the 2008 strike on Mumbai that killed more than 160 people, including six Americans.

Mr. Saeed, a Pakistani, set up Lashkar-e-Taiba in the 1990s, and the militant group became active in fighting Indian troops in the disputed Himalayan region of Kashmir. U.S. and Indian officials believe Lashkar-e-Taiba also masterminded the attacks...