By Aisha Chowdhry

ISLAMABAD (Reuters) - One of Pakistan's most feared Islamists accused President Barack Obama on Wednesday of starting a religious war against Muslims over his handling of a video that mocked the Prophet Mohammad.

Hafiz Saeed, accused by India of masterminding the 2008 attack by Pakistani gunmen on India's financial capital Mumbai, said Obama should have ordered steps to remove the film from the Internet instead of defending freedom of expression in America.

"Obama's statements have caused a religious war," Saeed told Reuters in an interview. "This is a very sensitive issue. This is not going to be resolved soon. Obama's statement has started a cultural war."

The Obama administration has condemned the film, which ignited Muslim protests around the world as "disgusting".

But Western countries remain determined to resist restrictions on freedom of speech and have already voiced disquiet about the repressive effect of blasphemy laws in Muslim countries such as Pakistan.

"Obama has said he cannot block the film," said Saeed. "What does that say?"

He said the United States should take tough action against the makers of the film.

"If not, then hand them to us," he said, flanked by bodyguards.

U.S., INDIA WANT PAKISTAN TO DETAIN SAEED

India has repeatedly called on Pakistan to bring Saeed to justice, an issue that has stood in the way of rebuilding relations between the nuclear-armed neighbors since the carnage in Mumbai, where gunmen killed 166 people over three days.

India is furious that Pakistan has not detained Saeed since it handed over evidence against him to Islamabad. Washington has offered a reward of $10 million for information leading to Saeed's capture.

Saeed founded Lashkar-e-Taiba (LeT) in the 1990s, the militant group which India blames for the rampage in Mumbai, where six Americans were among the dead.

He denies any wrongdoing and links to militants.

The $10 million figure signifies major U.S. interest in Saeed. Only three other militants, including Taliban leader Mullah Omar, fetch that high a bounty. There is a $25 million bounty on the head of al Qaeda leader Ayman al-Zawahri.

After the reward was announced, Saeed taunted the United States by holding a press conference at a hotel 40 minutes' drive away from the U.S. embassy in Islamabad, calling the bounty laughable.

On Wednesday, he again mocked the bounty, which has not led to Saeed's capture even though he openly moves around strategic U.S. ally Pakistan, fires up supporters at rallies and runs a huge charity.

"I am wandering in my own country," he said with a chuckle at a hotel where he and other Islamists gathered for a conference on the short film, called 'Innocence of Muslims'.

"So, what right does America have to put a bounty on my head? I have told America to start a case against me in court. So I can give my point of view. This is terrorism by putting a bounty on people's heads."

A Pakistani minister offered $100,000 on Saturday to anyone who kills the maker of the online video. A spokesman for Pakistan's prime minister said the government dissociated itself from his statement.

While many Muslim countries saw mostly peaceful protests, 15 people were killed in Pakistan during demonstrations over the video.

The United States has accused Islamabad of foot dragging in the case of Saeed.

Pakistan disputes U.S. charges of inaction against militants, saying it has suffered more casualties than any other country in fighting the Pakistani Taliban, other militant groups along the Afghan border and Islamist groups inside the country.

Saeed abandoned the leadership of the LeT after India accused it of being behind an attack on the Indian parliament in December 2001. But his charity is suspected of being a front for the LeT.

A short bearded man, Saeed lives near a park and a mosque in a villa with a policeman stationed outside, in the central city of Lahore, capital of Punjab.

Some of his bodyguards wear olive camouflage vests while others are dressed in dark traditional shalwar-kameez, baggy shirt and trousers. Clutching AK-47 assault rifles, a few are positioned on his rooftop.

These days, he is a prominent member of the Difa-e-Pakistan Council (Defense of Pakistan Council), an alliance of right-wing groups opposed to Pakistan's ties with the United States.

(Writing by Michael Georgy; Editing by Ron Popeski)