"I've watched LeT (grow) since the end of 2008, move to the West, become more active in other countries, more active throughout the region, more engaged with other terrorist groups," Mullen, who arrived in Pakistan today to meet with the leadership and military officials, said during an interaction with a group of journalists here.
Besides expanding to the West, the LeT "is in Afghanistan (and) other countries", Mullen said in response to questions.
He said there is "heightened concern about (LeT’s) emergence and what is significant (is its) emergence not only on the regional stage but potentially as a terror organisation with global aspirations".
"There is an increased level of concern where the LeT is and where it appears to be headed. It is something we all have to address," he said.
Mullen initially tried to parry a question on whether he had raised America's concerns about the LeT with Pakistan's leadership by saying that everyone would have to work together to address the threat posed by the group.
In response to a pointed question on the same issue, Mullen indicated he had raised the matter with the Pakistani leadership on more than one occasion.
"I tried to make the case that the LeT is a growing threat, it is an organisation that is becoming more lethal. (This has been) proven so and it is not just operating where it used to be. It's expanding, it is in the West, it is in Afghanistan, it is in other countries. All of us have to be concerned about it," he said.
India says Pakistan-based LeT, which was founded by terrorist leader Hafiz Muhammad Saeed, was behind the 2008 Mumbai carnage and wants Islamabad to take action against terror emanating from its soil against India.
The LeT, which was banned during the tenure of former military ruler Pervez Musharraf, re-emerged as the Jamaat-ud-Dawah. The JuD, which is also headed by Saeed, was banned by the UN in the wake of the Mumbai attacks.
Replying to another question, Mullen said the US believed top Al Qaida leaders, including Osama bin Laden and Aiman al-Zawahiri, are in Pakistan.
The presence of these terrorist leaders in the region is a reason why "a principal part of the overall Af-Pak strategy is focussed on eliminate safe havens" for them, he said.
US Secretary of State Hillary Clinton had ruffled feathers in Islamabad by claiming during a recent visit that bin Laden and other top Al Qaida leaders are in Pakistan.
Foreign Minister Shah Mahmood Qureshi had dismissed her assertion, describing them as "speculations".
US-led forces in Afghanistan recently said they had detected an influx of LeT operatives in Nangarhar province, which borders Pakistan's Khyber tribal region, and arrested several persons associated with the move to send Pakistani militants to fight alongside the Afghan Taliban.
Responding to questions, Mullen said Al Qaida leaders are hiding in a "very secure place" and it is difficult to trace them. He described Pakistan's tribal belt bordering Afghanistan as the "global headquarters" for the Al Qaida terror network.
Mullen praised Pakistan for moving against militants but said that there is still a need to take action against the Haqqani network, which has been disturbing peace inside Afghanistan.
He described the Haqqani group as "the most lethal network" faced by US-led international forces in Afghanistan and said he had repeatedly urged Pakistan to tackle this threat. Pakistani forces are aware of the threat posed by the Haqqani group, he said.
"The Haqqani network is strongly engaged and involved in insurgencies in Afghanistan and there is a need to take a much stronger position against it," said Mullen, who is on his 19th visit to Pakistan.
The US and Pakistan are strong allies in the war against terror and America will continue providing help and cooperation to Pakistan in this war, he said.
"The Pakistan government has made critical decisions to achieve success in the war against terrorism," he said.
Asked about the withdrawal of US forces from Afghanistan, he said such a move would not mark the end of the mission but the start of a process whereby the US military will stay in Afghanistan till complete peace is restored.
Answering a question about the reconciliation process in Afghanistan, Mullen said the US leadership is fully supporting the move led by Afghan President Hamid Karzai as both sides have a significant stake in this process. However, he cautioned that the time was not right for reconciliation with warring groups.
"Reconciliation can only be successful from a position of strength. In my perspective, we are not in that position of strength. We need to be in a very strong position for that to be meaningful but we are not there," he said.
Mullen acknowledged that there had been an improvement in the trust between Pakistan and US intelligence agencies but indicated that more could be done in this field.
He appreciated the role played by the Pakistan Army and the Inter-Services Intelligence in arresting and capturing terrorists.
Replying to a question, Mullen said the US has its own system of tracking the movement of terrorist across the Pakistan-Afghanistan border and information in this regard "does not come from the Indians".
Mullen denied the US had played any role in influencing the Pakistan government to give a three-year extension to army chief Gen Ashfaq Parvez Kayani, saying: "Pakistan is a sovereign country and it is an internal issue of Pakistan."
He also said there are "no secret American troops" in Pakistan. All US troops in the country were there at Pakistan's request for training purposes.