Headley was in touch with Pakistan officials, terrorists

The revelation by prosecution's star witness on the second day of the trial of his one time friend, Pakistan-born Canadian Tahawwur Rana in a Chicago court, has put Islamabad squarely in the dock, adding fuel to demands for stopping US aid to an unreliable ally in the fight against terrorism.

The issue has further strained US relationship with Pakistan amid mounting pressure from Congress to reduce foreign aid since the May 2 US raid on Al Qaeda leader Osama bin Laden's hideout in Abbottabad, just outside the Pakistani capital of Islamabad.

Federal prosecutors Tuesday also established Rana and Headley's long-time friendship with the consul general for Pakistan in Chicago. All three men attended the same top military school in Pakistan.

US-born son of a Pakistani father and an American mother, Headley had changed his given name of Daood Gilani in 2006 to scout targets for the Mumbai attack without arousing suspicion.

Giving vivid details of the terror plot he enlisted Rana to help carry out, Headley said he was recruited by Lashkar-e-Taiba (LeT) leader Hafiz Saeed to take part in the plot to attack Mumbai.

Describing his last several months in Mumbai, Headley said he received the final orders from his handler from Pakistan's spy agency, Inter-Services Intelligence (ISI), a man known only as Major Iqbal -- which he said provided help to the terrorists.

Major Iqbal was apparently upset that the Mumbai airport was not being considered as a possible target by the attackers, according to Headley's testimony.

Iqbal wanted Headley to scout the Indian Naval Air Station in Mumbai as well. "He was really keen on that," Headley testified.

Headley said he was asked to conduct surveillance and mark on his GPS the location of the Chabad house, a Jewish community centre in Mumbai.

Headley said that Major Iqbal was interested in attacking the Chabad House since Iqbal believed it was allegedly a front for the Mossad, Israel's intelligence service.

Headley said that the Chabad house was difficult to locate since it was at the end of a narrow alley, where his GPS could not receive a signal.

He described how he received instructions to shoot surveillance films for the attackers to help them plan their routes.

Headley also testified that he purchased traditional colourful bracelets worn by young boys and men in Mumbai so that the attackers would blend in.

In September 2008, Headley said that the planners for the attacks decided they would use what Headley called a "stronghold option" to barricade themselves in the hotels and fight to the death instead of trying to escape from Mumbai.

Headley testified about Abu Qahafa, one of the planners of the attack: "Abu Qahafa said if they knew they would leave, they would not fight as well."

It was during this time that it was decided the terrorist gunmen would use Indian cell phones to communicate with each other and their handlers.