Pakistani authorities say they have arrested a radical cleric and U.S.-wanted terror suspect blamed for the 2008 Mumbai attacks, just days ahead of Prime Minister Imran Khan's trip to Washington.

Counterterrorism official Mohammad Shafiq says Hafiz Saeed was taken into custody in Punjab province on Wednesday while he was traveling from the eastern city of Lahore to the city of Gujranwala.

He said Saeed appeared before a judge and was ordered held in jail until the next hearing.

Saeed founded the Lashkar-e-Taiba (LeT), alleged to be one of several groups who are fighting Indian troops in the disputed region of Kashmir. There are allegations that the group is supported by the Pakistani security establishment.

The group is blamed for the Mumbai attacks, which killed more than 160 people in the 2008 gun and grenade assault that lasted for three days in the Indian financial hub Mumbai. Six U.S. nationals died in the attacks.

The U.S. has offered a $10 million for him. The U.N. also designated Saeed as a terrorist.

Pakistan banned Saeed's charities earlier this year and has previously detained him, along with several close aides. However, he has not been charged or put on trial so far.

"Hafiz Saeed was going to Gujranwala to apply for bail in another case when he was arrested," a security official with knowledge of the arrest told AFP, who requested anonymity.

A spokesman for Saeed's group, Jamaat-ud-Dawa (JuD), a wing of the LeT militant organization confirmed the arrest to AFP, but gave no further details.

Another security official said the arrest relates to terror financing charges.

Saeed has spent years rotating in and out of varying forms of detention, sometimes under house arrest, sometimes briefly arrested then released again by authorities.

But for the most part he has been free to move at will around Pakistan, enraging India which has repeatedly called for his prosecution over his alleged role in the 2008 attack that killed more than 160 people.

Lashkar-e-Taiba is accused by India and Washington of masterminding the four-day assault on Mumbai. Saeed has denied involvement.

The move against Saeed comes as Pakistan is facing a potential blacklisting by the Financial Action Task Force (FATF) -- an anti-money-laundering monitor based in Paris -- for failing to do enough to combat terror financing.

FATF is set rule on its fate in the coming months after placing the country on a watchlist last year.

Turkey was the only country that opposed the move backed by the U.S, U.K., and India, with Beijing abstaining.

India -- co-chair of the joint group of FATF and Asia Pacific Group -- wants Islamabad to be placed on the Paris-based watchdog's blacklist of countries which fail to meet international standards in combating financial crimes.

However, an aggressive diplomatic push from Islamabad temporarily frustrated the looming threat with the support of Turkey, China, and Malaysia.

According to the 36-nation FATF charter, the support of at least three member states is essential to avoid the blacklisting.

The watchdog, in its five-day meeting in Florida in June, agreed that Islamabad made progress towards implementing the action plan -- negotiated between Pakistan and other FATF members -- but still sought "dissuasive sanctions" and "effective prosecution".

In recent months, Pakistan has taken some major steps in accordance with the action plan, which includes bans on foreign currency transactions without a national tax number, and on currency changes of up to $500 in the open currency market without submission of a national identity card copy.

In February, Pakistani authorities banned Saeed's Jamaat-ud-Dawa and Falah-e-Insaniat Foundation -- charities that have long been considered fronts for militant activity targeting India.

Washington and New Delhi have long urged Pakistan to take action against LeT, which was banned by Islamabad in 2002 but re-branded itself as JuD and FIF.

And earlier this year, Pakistan arrested more than 100 suspected militants and shuttered hundreds of religious schools.

The arrests came during an ongoing crackdown on extremists, following clashes with India after a Pakistan-based group killed dozens of Indian security forces in a suicide bombing in Kashmir.