Nov. 25, 2009  -- For the first time, Pakistan has acknowledged connections between its military and two Chicago men accused of planning a terrorist attack in Denmark.

Maj. Gen. Athar Abbas, chief spokesman for Pakistan's military, confirmed that a retired major had been arrested for connections with David Headley and Tahawwur Rana. Last month, the FBI arrested and charged the men with planning a terror attack on the Danish newspaper that published cartoons of Prophet Mohammed in 2005.

Abbas denied reports that active members of the Pakistani military have been arrested in connection with the case.

Court documents link Headley and Rana to Lashkar-e-Taiba, the Pakistan-based terrorist organization blamed for the 2008 attacks on Mumbai, India and the 2001 attack on the Indian parliament.

Pakistan banned the terror group Lashkar-e-Taiba, but security officials acknowledge it still exists and over the past few months, members of the organization have told reporters that they are still recruiting for and plotting attacks in India.

The terror group was created in part by Pakistan's spy agency, the ISI, in the late 1980s to attack Afghanistan and India. Abbas denied reports that any current or former ISI agents had been arrested in connection with Headly or Rana.

Had Headley and Rana carried out their alleged attack against the Danish newspaper, Morgenavisen Jyllands-Posten, it would have been one of the first assaults outside of South Asia with Lashkar-e-Taiba connections, U.S. officials said.

Prosecutors told ABC News.com that the men were in direct contact with the leaders of militant groups connected to al-Qaeda in Pakistan and those behind the Mumbai attacks.

Headley, 49, was arrested on Oct. 3 and has been held without public notice since then, according to prosecutors in Chicago. Headley, a U.S. citizen of half-Pakistani heritage who was born Daood Gilani, had an initial appearance in court on Oct. 11.

CLICK HERE TO READ THE COMPLAINT AGAINST HEADLEY.

Connections to al-Oaeda

Rana was arrested on Oct. 18 and had his initial court appearance that day.

CLICK HERE TO READ THE COMPLAINT AGAINST RANA.

Authorities say Headley "waived his rights" and has made statements to the FBI about his connection to the Pakistan terror groups. The FBI arrested him at Chicago's O'Hare International Airport as he was about to board a flight to Philadelphia for an onward trip to Denmark.

FBI agents said he was carrying a copy of the newspaper, a street guide for Copenhagen, a list of phone numbers and a computer memory stick with ten short videos of the newspaper's offices and the entrance to a military barracks in Copenhagen.

Authorities said the plot against the paper was referred to as the "Mickey Mouse Project" in communications between Headley and his contact in Pakistan. Headley had already traveled to Copenhagen in January and visited two different offices of the newspaper, the FBI said.

Rana had reservations to fly to Copenhagen on Oct. 29, the FBI said.

From Denmark, Headley then flew to Pakistan and met with his contact there, according to the complaint.

Authorities identified the contact as Ilyas Kashmiri, a commander of the Lashkar-4-Taiba group, which claimed responsibility for the Mumbai attacks. The U.S. thought it had killed Kashmiri in a recent drone strike. Someone claiming to be Kashmiri recently gave an interview to a Pakistani newspaper, in which he said he supported al-Qaeda and that attacks such as the ones in Mumbai will be "nothing compared to what has already been planned."

Headley, according to prosecutors, posted a message on an internet site in October, stating, "I feel disposed towards violence for the offending parties" for "making fun of Islam."

According to authorities, other target code words include 'investments,' 'projects,' 'business' and 'action.'

Headley is set to appear in court again Dec. 4.

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