ISLAMABAD, Pakistan, Dec. 11 -- Pakistan on Thursday closed 11 offices of a controversial Islamic charity that has been linked to last month's deadly attacks in the Indian city of Mumbai and placed the group's leader under house arrest. In India, top government officials announced a massive revamping of the country's security infrastructure, including creation of an FBI-style national agency to investigate terror attacks.

Hafiz Sayeed, the leader of the organization Jamaat-ud-Dawa, was put under house arrest in Lahore, according to a Pakistani foreign ministry official who spoke on condition of anonymity. The arrest was confirmed by a top Jamaat-ud-Dawa official.

Sayeed was one of four individuals singled out by the United Nations Security Council late Wednesday when it placed Jamaat-ud-Dawa on a list of designated terrorist organizations and imposed sanctions on the group, including a freeze on assets, a travel ban and an arms embargo. The U.N. also said the charity was directly linked to Lashkar-i-Taiba, the outlawed Pakistani militant group that Indian authorities blame for the three-day siege in Mumbai that killed at least 171 people, including six Americans.

"Pakistan has taken note of the designation of certain individuals and entities by the U.N.," Pakistani Prime Minister Yousaf Raza Gillani said in a statement hours before the house arrest, noting that the country would "fulfill its international obligations."

Also included in the sanctions were Zaki-ur-Rehman Lakhvi, the alleged operational commander and architect of the Mumbai attacks, and alleged Lashkar financiers Haji Muhammad Ashraf and Mahmoud Ahmed Bahaziq. Pakistani security forces arrested Lakhvi Sunday.

Before arresting Sayeed late Thursday, Pakistan shuttered nine Karachi offices of Jamaat-ud-Dawa and the group's main offices in Lahore and Muridke. Jamaat official Amir Hamza said Thursday night that 70 to 80 members of the organization were rounded up in raids that took place across the country. Hamza said Pakistani authorities had placed him and eight others on a wanted list and were preparing to arrest them.

"We are expecting to be picked up any minute," Hamza said. "We will fight our battles in court. We will not resort just to street protests. This is a great injustice."

Indian officials hailed Wednesday night's U.N. action as a long overdue step in the right direction, and called on Pakistan not to repeat a past pattern of arresting suspected extremists -- including Sayeed -- and then letting them go without standing trial..

"This only underscores what India has maintained throughout. That the forces of violence and terror, the organized groups which have attacked India on many occasions . . . pose a threat to civil world," Indian Deputy Foreign Minister Anand Sharma said.

Foreign Minister Pranab Mukherjee told the country's parliament that Pakistan needed to follow up on its promises of action against militant groups. "They are banning organizations. Lashkar-i-Taiba was banned. But simply they are changing names, they are changing signboards," Mukherjee said. "Faces are the same, ideology are the same. How does it help us?"

Sayeed reacted to the imposition of sanctions with a news conference at his Lahore headquarters, hours before he was placed under house arrest. He denied reports that he had met with a Mumbai attacker and said his group split from Lashkar after Pakistan banned Lashkar following a 2001 attack on India's parliament. Sayeed said Jamaat-ud-Dawa would lodge a strong protest with the U.N. and the International Court of Justice in the Hague.

"Jamaat-ud-Dawa is a thorn in the eye of India because Jamaat-ud-Dawa does not support anything which India does to Pakistan or Kashmir," Sayeed said.

MUMBAI, India (CNN) -- The head of a small fishing community along the coast of Mumbai says he warned Indian police about terrorists smuggling powerful explosives months before gunmen entered through the harbor and launched a deadly siege against the city.

Angry demonstrators in Mumbai shout anti-Pakistan slogans on Wednesday.

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Based on information from the lone surviving gunman, six bombs were placed around Mumbai by the 10 attackers as they surged through India's financial capital last week, killing 179 and wounding hundred more.

Two exploded in taxis in separate parts of the city during the attacks. After the siege ended, authorities found one bomb at the Oberoi hotel and two at the Taj Mahal -- the two luxury hotels where gunmen took hostages.

On Wednesday, officials found another bomb at a train station but the timer device on the explosive was not active, said railway official K.P. Raghuvanshi.

According to Indian officials, the attackers hijacked a trawler in the Pakistani port city of Karachi -- about 575 miles (925 km) north of Mumbai -- and came ashore at Mumbai in dinghies.

The fisherman, Damoda Tandel, showed CNN a letter in which he warned Indian authorities about a tip that terrorists were using the harbor to import RDX, an explosive compound commonly used in military and industrial applications. He says police did nothing.

Police say the information Tandel gave was too vague to act upon.

Now, Tandel is angry and afraid, worried there could be more explosives planted around Mumbai -- though authorities say they believe all the bombs have been found. Still, the fisherman says the police could have prevented the gunmen from coming ashore by securing the harbor.

Under pressure to explain the lapse of security that allowed the siege to occur, India has made clear that it believes the coordinated attacks in Mumbai originated in Pakistan.

A police official leading the investigation says the attackers spent the past three months in Pakistan carefully planning their strike on India's financial capital.

Mumbai Joint Police Commissioner of Crime Rakesh Maria said the information comes from his interview with the suspect in custody, who police say is the lone surviving attacker.

Maria identified the suspect as Mohammed Ajmal Kasab, 21, from Faridkot village in the Okara district of Pakistan's Punjab province. He is the son of Mohammed Amir Kasab, the police commissioner said.

Multiple law enforcement and intelligence sources familiar with the investigation said Kasab was put through a polygraph test and has also been interviewed by the FBI.

Maria said all 10 attackers were Pakistanis, which Pakistani officials have denied, blaming instead "stateless actors."

The band of gunmen attacked 10 targets in Mumbai on Wednesday night, sparking three days of battles with police and troops in the heart of the city that is the hub of India's financial and entertainment industries. Most of the deaths occurred at the city's top two hotels, The Oberoi and the Taj Mahal.

Maria said Kasab spend the past 18 months training at various camps run by Lashkar-e-Tayyiba -- a Pakistan-based terror group allied with al Qaeda. Kasab told police he joined the group, known by its acronym LeT, six months before he began training.

Pakistan banned LeT in 2002, after an attack on the Indian parliament that brought the nuclear rivals to the brink of war.

The training primarily took place in the Kashmiri city of Muzaffarabad, Maria said.

"He was told things like, 'You'll come in through this door, then go over here, then go out through that door,'" Maria told CNN. "Very, very detailed explicit instructions. The gunmen were hand-picked, but there were no examinations per se."

All of the attackers were trained in Kashmir by former Pakistani army officers, but they apparently did not know each other.

"While in the camps they all had code names," Maria said. Watch claims attackers came from Pakistan »

Kasab was trained to handle small arms as well as automatic weapons, the police commissioner said. He also received "explosives training, survival training, (and) nautical training."

During the last three months of the training, which focused on the Mumbai strike, Kasab was "shown photographs of the locations he was to target," including one of the city's main railway stations and a hospital.

Police have identified Kasab as the clean-shaven young man photographed in a black T-shirt carrying an assault rifle during the attack on Mumbai's Victoria Terminus train station, also known as Chhatrapati Shivaji Terminus (CST).

Maria said Kasab joined LeT because he was poor, but he expressed surprise at how easily he was "brainwashed" into joining the terror group.

LeT has denied any role in the attack. The only claim of responsibility has been in an e-mail -- which Indian police say originated in Pakistan -- from a previously unknown group calling itself the Deccan Mujahedeen.

Maria said he thinks LeT used the name Deccan Mujahedeen because it operates illegally in Pakistan.

He described the 21-year-old suspect as someone who would go unnoticed, with a criminal record in Pakistan for only petty theft. But he said Kasab is a cold-blooded killer.

Kasab told police investigators that he shot a small boy and, because he was crying, "He shot him again, and killed him, to shut him up," Maria said.

Kasab told the Indian investigators that the mission to strike Mumbai began on November 23 -- the Sunday before the attack -- when the attackers loaded a boat with their weapons, ammunition, and fake Indian identification documents, Maria said.

A few days later, they hijacked a Pakistani fishing vessel near Indian international waters, and used that vessel to cover most of the approximately 500 nautical miles from Lahore, Pakistan, to Mumbai, he said.

This account was confirmed by Mumbai's police chief in a news conference on Tuesday, who also cited the suspect's police interview.

Maria said, according to Kasab's account, that the 10 attackers killed the captain and the crew, left them on the boat, and headed ashore in inflatable dinghies on Wednesday, the day of the attack.

Asked if Kasab's testimony could be trusted, Maria said the suspect's description of the captain's body and the location of the attackers' satellite phone and global-positioning system matched what investigators found on the boat.

"The dead captain lay in the front of the boat face down with his throat cut hands tied behind his back," Maria said.

He also noted that the weapons used in the attack can be traced back to Pakistan.

Maria said none of the attackers were carrying their identification documents because they did not expect to return home. Watch survivor recount Mumbai horror »

The police commissioner said the operation, as described by Kasab, was unique in its planning and execution -- not just in India, but worldwide. He said he expects Kasab to provide more details in his ongoing interrogation by Indian police, who have 90 days to charge him.

They intend to charge Kasab with terrorism and seek the death penalty, which in India is carried out by hanging. They expect the whole process to take a year to 18 months.

Maria said Kasab was not being tortured for answers.

With the highly proficient National Security Guard commandos having killed the last of the terrorists holed up in the Taj Hotel in Mumbai, the question on everyone’s mind is what effect the tragedy will have on the economy. Despite some clear differences between the Mumbai tragedy and the 9/11 New York calamity, the latter provides a good starting point for answering this question. The effects of the 9/11 events, now extensively studied and analyzed, may be considered at the local level on New York City and at the national level on the United States.

In the immediate aftermath of the 9/11 terrorist attacks, many analysts predicted significant permanent damage to the economy of the New York City. There is now virtual consensus, however, that the effects were smaller than initially predicted and were short-lived. A July 12, 2006, report by the Federal Reserve Bank of New York concluded that the economic effects of the terrorist attacks were sharp but short-lived and had largely disappeared by the end of 2002. According to the Federal Reserve report, New York City recovered from the 2001 recession--well under way at the time of the attacks--at least as fast as the rest of the country. Average incomes in the following four years rose faster for the city’s residents than the rest of the nation.

At the national level, the Sept. 11 tragedy had no measurable effect. A 2002 study authored by Gail Makinen and published by the Congressional Research Service, observed that the initial fears that the event would have serious adverse effects on aggregate demand proved wrong. At the time of the attacks, the economy was in the third consecutive quarter of contraction. By the fourth quarter, growth had resumed. This strongly suggests that any adverse effects of the attacks on aggregate demand were truly short-lived and small in magnitude.

Several factors suggest that the effects of the Mumbai attacks, though devastating for far too many families at the personal level, will be less significant than those of 9/11 attacks. To begin with, the 9/11 attacks were the first ever by foreign terrorists on U.S. soil. They were perhaps also far more dramatic and took many more lives. As such, they left a deep psychological impact on a vast number of Americans, especially in New York. The Mumbai attacks are also more heinous and dramatic--and wider in scope--than anything Mumbai has witnessed previously. Yet they are not entirely new to Mumbai. Psychologically, Mumbai and India are better prepared to deal with such tragedies than the U.S. was immediately following 9/11. This makes the prospects of Mumbai bouncing back rapidly substantially better.

Indeed, I was surprised to learn from my former Columbia student Catherine Delain, who has been on a visit to India for the last three weeks, that she could arrive at Mumbai at 5 a.m. by train from Vadodara immediately following the night of the massacre at Victoria Terminus station, and, within an hour, could also take the train from the Terminus to Aurangabad.

Catherine could observe the signs of the vast tragedy strewn all over in the station and yet found, to her astonishment, that the railway staff was out there going about their jobs as if it were a normal day! And of course, flights into and out of Mumbai never stopped during the 60-plus hours of the clean-up operation.

Equally reassuring was the effect on the stock market. Following 9/11, the stock market in New York had to be closed down for almost a week. When the market opened on Sept. 17, the Dow Jones index, which had closed at 9,605 on Sept. 10, fell to 8,920. In Mumbai, markets opened on Friday (Nov. 28, 2008), after just a one-day break--with the tragedy still in progress. A day earlier, markets in Singapore and elsewhere had reacted negatively, with the rupee declining in value. Yet, the Sensex on the Bombay Stock Exchange rose 0.7% on Friday, reaching a two-week peak.

Pakistan initially said Friday that it had agreed to send its spy chief, Lt. Gen. Ahmed Shuja Pasha, on an unprecedented visit to India to share and obtain information from investigators there. Later Friday, however, Pakistani officials changed their minds and decided to send a less senior intelligence official in Pasha's place, according to a Pakistani source who spoke on the condition of anonymity.

It was unclear what prompted the reversal, but the Pakistani source said the Islamabad government was "already bending over backwards" to be cooperative and did not "want to create more opportunities for Pakistan-bashing." Pakistan's defense minister, Chaudhry Ahmed Mukhtar, told reporters in Islamabad, "I will say in very categoric terms that Pakistan is not involved in these gory incidents."

Meanwhile, Indian authorities ramped up their accusations that the plot had Pakistani connections. "Preliminary evidence, prima facie evidence, indicates elements with links to Pakistan are involved," Indian Foreign Minister Pranab Mukherjee said at a news conference in New Delhi. Other Indian officials echoed the statement, but none provided details.

Evidence collected by police in Mumbai, along with intelligence gathered by U.S. and British officials, has led investigators to concentrate their focus on Islamist militants in Pakistan who have long sought to spark a war over the disputed province of Kashmir. India and Pakistan have already fought two wars over Kashmir, the battleground between Hindu-majority India and Muslim-majority Pakistan that each country claimed soon after India's partition in 1947.

A U.S. counterterrorism official said additional evidence has emerged in the past 24 hours that points toward a Kashmiri connection. "Some of what has been learned so far does fall in that direction," the official said, declining to offer specifics.

"We have to be careful here," said the official, speaking on the condition of anonymity. "When you posit a Kashmiri connection, that puts Pakistan on the table. That is huge, enormous, but what does it mean? It can be anything from people who were [initially] in Pakistan, to maybe people who used to be associated with someone in the Pakistani government, to any gradation you could find."

Pakistani President Asif Ali Zardari, who has sought a rapprochement with New Delhi, rejected widespread suspicions in India that Pakistani intelligence services may have supported the Mumbai gunmen. "The germs of terrorist elements were not produced in security agencies' labs in Pakistan," he said Friday.

Analysts said Pakistan's pledge to assist in the investigation and send its spy chief to India was a sign of the high stakes involved. When armed Kashmiri militants tried to take over the Indian Parliament in December 2001, the fallout was immediate, as both countries responded with a massive military buildup along their shared border.

"A Pakistani link here would be so utterly damaging, all the way around, to Indo-Pakistani relations," said Shaun Gregory, a professor of international security at the University of Bradford in England and a specialist on Pakistan. The decision to dispatch Pasha to India, he said, "does signal a determination on Pakistan's part to clarify that even if there's a Pakistani link here, that it had nothing to do with the government."

A senior Pakistani official said the idea for Pasha's visit came during a telephone conversation Friday between Indian Prime Minister Manmohan Singh and Pakistani Prime Minister Yousaf Raza Gillani. Singh, who had previously blamed the Mumbai attacks on groups "based outside the country," offered to provide evidence to Gillani.

"One way to ensure that" was to send Pakistan's intelligence chief, the Pakistani official said. "If there is evidence, share it."

Pakistani officials, responding to charges by Indian leaders that the attack was carried out by an organization with ties to Pakistan, said Friday that a senior intelligence officer would travel to India, in an apparent attempt to ease tensions between the two nuclear-armed states.

Indian officials said they believe that at least some of the gunmen reached Mumbai by sea. After an interrogation of one of the attackers, Indian intelligence officials said they suspected that a Pakistani Islamist group, Lashkar-i-Taiba, was responsible. An Indian intelligence document from 2006 obtained by The Washington Post said members of the group had been trained in maritime assault.

Authorities said that the death toll had risen to 195 as more bodies were discovered and that 295 people were wounded, in attacks on the hotels, the Jewish center and several other sites in Mumbai. Among the dead were two Americans from Virginia; the American rabbi who ran the city's Chabad-Lubavitch center and his Israeli wife; and three of their visitors, including an American man, an Israeli woman and a man with U.S. and Israeli citizenship. In all, at least 16 non-Indians have been reported killed.

Security forces killed the last gunmen holed up in the Taj Mahal Palace and Tower Hotel here early Saturday and clean-up operations around the sites that had been attacked continued through the day. 

The government used 350 security forces and 400 police officers to capture or kill the gunmen, officials announced at a news conference Saturday. On the basis of preliminary inquiry, we know that there were a total of 10 terrorists. Nine have been eliminated, one is caught," said Vilasrao Deshmukh, the chief minister of the state of Maharashtra, of which Mumbai is the capital. "They split into teams of two for action, and there were four at the Taj."

In Washington, the White House announced that President Bush would speak about the Mumbai attacks at 12:30 p.m. Eastern time.

President-elect Barack Obama spoke Friday evening by phone with Indian Prime Minister Manmohan Singh to offer his condolences for those killed, Obama's office announced Saturday.

Secretary of State Condoleezza Rice spoke by telephone Friday with Obama for the third time since the attacks began to update him on information coming from India.

"These terrorists who targeted innocent civilians will not defeat India's great democracy, nor shake the will of a global coalition to defeat them," Obama said in a statement. "The United States must stand with India and all nations and people who are committed to destroying terrorist networks, and defeating their hate-filled ideology."

Deshmukh denied that there was any final statement to make about the nationality of the slain gunmen. But he said that the government was only certain that the one in their custody had confessed to being from Pakistan. He said Indian officials had no specific intelligence about an impending attack.

"The information that we get is always general, not specific. Mumbai is always on the target, it is a commercial city, it is an international city," he said. "It is a sensitive place, there is no denying that. But this kind of attack, not just on Mumbai but also on the nation, is something we did not anticipate."

Terror Attacks Stagger the New Mumbai

The reputation of the rising Asia financial center is battered after terrorists kill 150 in the Indian city's latest violent chapter

Indian commandos assemble on the terrace of Nariman House as they prepare an assault in Mumbai on Nov. 28. Indian newspapers have slammed the government and intelligence agencies for failing to prevent the Mumbai attacks. INDRANIL MUKHERJEE/AFP/Getty Images

Meet the targets of the Mumbai terrorist attacks: CEOs meeting their boards, millionaires looking to buy yachts, financiers prepping for a private equity conference, a prominent family and friends gathered for a wedding.

Until Wednesday night, Nov. 26, when armed gunmen sneaked in from the Arabian Sea and plunged this city into a three-day nightmare, these were the people who made up the new Mumbai; staunchly cosmopolitan, ferociously competitive on the global stage, and luminous markers of India's soaring aspirations.

Now, after three nights of gun battles and explosions that left at least 150 dead—more than a dozen of them foreigners—Mumbai may have taken a hit to its most precious asset: its reputation. "You can't keep having these events and not affect the image of the city," says Aninda Mitra, an analyst at Moody's (MCO). "But if you can't [improve things fast] the government will find itself not just worrying about the image, but the reality."

Amid an Economy Losing Steam

In recent years, Mumbai has been transformed from a city known for textiles and kitschy cinema to a financial powerhouse that serves as a gateway to India. It's the brightest beacon of the country's economic miracle, though there's still an overabundance of poverty—and no shortage of the secular strife that often threatens to rip India apart. In July 2006, 187 people were killed as coordinated bombs ripped through commuter trains in the crowded city. Three years before that, 60 people were killed by car bombs. And a decade before that, in 1992 and 1993, Hindu-Muslim riots claimed another 1,000.

Yet through it all, Mumbai has thrived, positioning itself proudly as an alternative to Hong Kong or Tokyo as the capital of Asian finance. Its stock exchange is among the world's busiest, its banking community the envy of South Asia, and its restaurants and nightlife closing in on those of any global cultural capital. "This sort of thing has happened before, and it can't stop Mumbai," says Omkar Goswami, the founder of the Corporate & Economic Research Group, and once the chief economist for India's biggest industry lobby. "Nothing has stopped our economy, nothing has changed Mumbai."

Indeed, on Friday, the Bombay Stock Exchange opened just a short distance from where terrorists still held hostages. The markets flared up in patriotic defiance, with the benchmark Sensex index closing up 66 points on a day when most expected it to drop. But India's economy has already lost steam, with GDP growth slowing to 7.6% and foreign institutional investors withdrawing more than $13 billion from its equity markets, leaving the Sensex at less than half where it stood a year ago. "The important question to ask is, what will the Indian state do now?" says Goswami. "The police, the intelligence gathering, how do you beef them up? These are the decisions which will decide what the impact of these terrorist attacks are."

Without doubt, Mumbai's economy, which contributes as much as 5% of India's $1 trillion GDP and nearly a third of its direct taxes, will take a while to limp back to normal. For three days now, trains have run empty, schools and offices have remained closed, and Mumbai residents, heeding a call from the government, have stayed indoors. On Friday afternoon, when a few people started trickling out of their homes, a false alarm about more armed gunmen at train stations sent them scrambling back. "There will be fewer board meetings, fewer deals being made, fewer people doing business," says Mitra, of Moody's. "But this won't last long." After all, says A.M. Naik, chairman of Indian engineering giant Larsen & Toubro, "Despite these issues, the world is not going to miss participating in an economy growing between 7 to 8%."

Commandos who stormed the Mumbai headquarters of an ultra-orthodox Jewish group found the bodies of five hostages inside, including a New York rabbi and his wife, officials said, as a fresh battle raged at the luxury Taj Mahal hotel and other Indian forces ended a siege at another five-star hotel.

More than 150 people have been killed since gunmen attacked 10 sites across India's financial capital starting Wednesday night, including 22 foreigners - four of them Americans, officials said.

Early Friday night, Indian commandos emerged from a besieged Jewish center with rifles raised in an apparent sign of victory after a daylong siege that saw a team rappel from helicopters and a series of explosions and fire rock the building and blow giant holes in the wall.

Inside, though, were five dead hostages.

A delegation from Israel's ZAKA emergency medical services unit entered the building after the raid and reported through an Indian aide that five hostages and two gunmen were dead, a ZAKA spokesman in Israel said. The spokesman had no information on the hostages' identities or whether there were wounded inside.

Jewish law requires the burial of a dead person's entire body, and the mission of the ultra-Orthodox ZAKA volunteers is to rescue the living - and in the case of the dead, carry out the task of gathering up all collectable pieces of flesh and blood.

Numerous local media reports, quoting top military officials, also said five hostages and two gunmen had been killed in the Jewish center.