India has asked Pakistan to arrest Hizbul Mujahideen leader Syed Salahuddin and hand him over to New Delhi if at all the country was serious about fighting terrorism.
The call came after Indian officials said that Pakistan-backed Islamists may have carried out or planned last week's bomb blasts in Mumbai that killed more than 180 people.
Pakistani President Pervez Musharraf has offered to help in the investigation into the bombings.
"The self-styled chief of the Hizbul Mujahideen Syed Salahuddin, who is freely roaming in Pakistan and in PoK should be arrested and handed over to India," Indian Foreign Ministry spokesman Navtej Sarna said.
The Hizbul Mujahideen, led by the Pakistan-based Salahuddin, is the biggest terrorist group fighting Indian rule in Kashmir, where more than 45,000 people have been killed since 1989.
Sarna said that New Delhi also wanted Pakistan to ban another terrorist group, the Jamaat-ud-Dawa, which the United States says is a front for the Lashkar-e-Taiba.
The Hizbul Mujahideen quickly dismissed the Indian demand.
"No one has any right to arrest Syed Salahuddin or any Kashmiri from their homeland," Ehsan Elahi, the group's spokesman said.
"India has occupied our territory and does not have any right to make such demand."
On Thursday, Musharraf urged India not to indulge in a "blame game" after the Mumbai blasts and said that the two countries should take the two-and-a-half-year peace process forward.
Sarna said that India was committed to the peace process, but urged Pakistan to act against the terrorists.
"Let me add that India remains committed to the dialogue process with Pakistan but this can be sustained or yield results only if Pakistan acts against terrorist groups operating from territories under its control," he added.