Islamabad, Pakistan - The US has expressed "deep concern" at the release of Hafiz Muhammad Saeed, the alleged mastermind of the 2008 attacks in the Indian city of Mumbai that killed more than 160 people, calling for him to be "arrested and charged for his crimes".

Saeed was released in the early hours of Friday in the eastern Pakistani city of Lahore, after a court rejected a government application to extend his detention under anti-terrorism laws, saying there was no evidence to support the application.

The Lashkar-e-Taiba (LeT) founder had been under house arrest since January.

"The United States is deeply concerned that Lashkar-e-Tayyaba (LeT) leader Hafiz Saeed has been released from house arrest in Pakistan," Heather Nauert, US state department spokesperson, said in an emailed statement.

"LeT is a designated Foreign Terrorist Organisation responsible for the death of hundreds of innocent civilians in terrorist attacks, including a number of American citizens. The Pakistani government should make sure that he is arrested and charged for his crimes."

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Saeed denies any involvement in the Mumbai attacks or connection to LeT, which has been blamed for a series of deadly attacks against Indian security forces and civilians, mostly in the disputed territory of Kashmir.

In 2012, the US placed a $10m bounty on his head for his alleged role in the Mumbai attacks.

Saeed says he now heads Jamaat-ud-Dawa (JuD), a charitable organisation. Both the UN and US have designated JuD as a front for LeT, and many of its leaders, including Saeed, remain subject to UN and other international sanctions.

In 2002, Pakistan banned the LeT as a "terrorist" organisation, and, since 2008, authorities say they have been abiding by UN sanctions that subject JuD to an assets freeze, arms embargo, and international travel ban.

JuD, however, continues to operate freely across the country, and is often seen at the forefront of humanitarian relief efforts following natural disasters. It also runs a network of seminaries, and releases several periodical publications.

In August, the group launched a political party, taking part in a key by-election in Lahore.

Fiery Friday sermon

Addressing scores of supporters at midday prayers in Lahore on Friday, Saeed blamed his incarceration on Pakistan’s eastern neighbour, India.

He labelled Nawaz Sharif, who was recently removed as prime minister over corruption allegations, a "traitor" for pursuing peace with India.

Sharif’s PML-N party remains in government, and he was succeeded by Shahid Khaqan Abbasi, a party loyalist, in August.

India registered its protest shortly after Saeed’s release was ordered by the court.

"India as indeed the entire international community is outraged that a self-confessed and UN proscribed terrorist is being allowed to walk free and continue with his evil agenda," Raveesh Kumar, Indian foreign ministry spokesperson, said on Thursday.

Kumar accused Pakistan of "shielding and supporting non-state actors".

At the JuD headquarters in Lahore, Saeed was defiant, shaking hands with long lines of jubilant supporters who had gathered to welcome him after his release.

"I am very happy that no accusation against me has been proven that would detrimental to either myself or my country," he said in a video statement shared just after his release in which he pledged to continue fighting for the Kashmiri cause.

"I am fighting for the Kashmiri people, and will continue to do so."

Pakistani rebuttal

In response to the Indian criticism, Pakistan said it remains committed to the implementation of UN Security Council 1267 sanctions regime.

"Pakistan's resolve, actions and successes in the fight against terrorism, terrorist violence and terrorists is unmatched in the world," the Pakistan foreign office said in a statement.

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"Pakistan condemns and opposes all forms of terrorism by any individual or group.

"Pakistan also opposes and condemns acts of terrorism inside Pakistan and elsewhere by India, which claims to be a champion of democracy, and international law."

India and Pakistan have fought two of their three wars since gaining independence from the British in 1947 over Kashmir, which both claim in full but administer separate parts of.

India accuses Pakistan of supporting LeT and other armed groups that back the separatist movement in Indian-administered Kashmir. Pakistan denies any role in the separatist movement.

Asad Hashim is Al Jazeera's Web Correspondent in Pakistan. He tweets @AsadHashim