Did Pakistani intelligence help plan and finance Mumbai attacks?

Two and a half years after armed militants stormed ashore in Mumbai and launched an assault that left more than 160 people dead, court proceedings have begun in the US which could expose disturbing allegations that elements within Pakistan's notorious intelligence agency helped plot and finance the operation.

Amid tight security at the Dirksen federal courthouse in Chicago, the jury selection process has started in the trial of the Chicago-based businessman Tahawwur Rana, who is accused of helping an old school friend scout targets in India for the Pakistani militants. Among the targets identified by David Coleman Headley were the locations in Mumbai that the 10 Lashkar-e-Taiba militants laid siege to for up to three days.

Mr Rana has pleaded not guilty and in the days ahead his lawyers will argue that he had no idea what his old friend was plotting. Headley, who has already pleaded guilty to his role in order to avoid the death penalty, is likely to be called as a prosecution witness. It is expected that he will say he was working for handlers from Pakistan's Inter-Services Intelligence (ISI) agency who were in close and regular contact with the militants who carried out the attack. Bahukutumbi Raman, a former national security adviser to the Indian Government, said: "This trial is important. Rana will say he did whatever he did on behalf of the ISI."

For Pakistan, the trial could barely come at a more difficult time. Two weeks after US special forces killed Osama bin Laden at a compound in the Pakistani town of Abbottabad, less than three hours north of the capital, the country's military and political establishment has been fending off accusations that the authorities must have known where the al-Qa'ida leader was hiding. The ISI has found itself coming in for rare and sustained public criticism and its head, Lieutenant-General Ahmed Shuja Pasha, has offered to resign after admitting to an intelligence failure.

Relations between Pakistan and the US, always tense, have descended to a new low. Yesterday, the two countries issued a joint statement in which they said they would work together in future operations against high-value targets, as John Kerry, the chairman of the US Senate Foreign Relations Committee, visited Pakistan both to push Washington's demand that Islamabad do more against militants and to smooth ruffled feathers.

The US has given up to $20bn in military and development aid to its regional ally since 2001.

"My goal in coming here is not to apologise for what I consider to be a triumph against terrorism of unprecedented consequence," Senator Kerry said. "My goal in coming here has been to talk about how we manage this important relationship." He also revealed that the Secretary of State, Hilary Clinton, would soon visit Pakistan.

Yet the allegations that appear certain to emerge from the Chicago trial are likely to make things more difficult for Pakistan, which has always insisted that neither the ISI nor any other state organisation had a role in the 2008 attacks.

Headley reportedly told interrogators the ISI provided training and funds for the assault against India's financial capital. He also said Mr Rana, a Pakistani-Canadian who he met at a military training academy near Islamabad when the pair were young men, provided him with cover for a series of scouting missions. He told officials his handler within the ISI was a "Major Iqbal".

Mr Rana, who is charged with providing material support to terrorists, runs an immigration services business in Chicago, and he apparently allowed Headley to set up a branch in Mumbai to provide him with a cover story.

His lawyers have indicated that he believed Headley was working for the ISI on a non-violent operation to monitor Hindu extremists and that, because the US had a relationship with the ISI, he believed he had committed no crime. One of Mr Rana's lawyers, Patrick Blegen, said last week: "Part of the defence will be that Headley used his connections with ISI to explain the things he was doing."

The trial is expected to last a number of weeks. Yesterday, up to 100 potential jurors who arrived at the court were asked to fill out questionnaires as part of a jury selection process.

The case is being particularly closely watched in India. Nitin Pai, an analyst and editor of Pragati: The Indian National Interest Review, said: "It's unlikely the trial will reveal anything that will add to what we already know about the big picture, [but] some details might emerge as to the exact pathways in which the military-jihadi complex operates. As long as Pakistan continues to use terrorism as an instrument of policy, it cannot have good relations with any country, leave alone India. An increasing number of people in Pakistan have received this message."

Teenage school friends, but did they conspire in 2008?

The witness

David Headley was born Daood Gilani in 1960. His father was a Pakistani diplomat and his mother an American. He attended an elite military school in Pakistan but went back to the US when he was 17 to join his mother, who was by now divorced and running a bar. By most accounts, the transition to living in the US was a traumatic one. Headley spent time in prison for drugs trafficking and gave evidence to the US authorities in return for a lesser sentence. He joined Lashkar-e-Taiba and made his first trip to a training camp in February 2002. He became a surveillance scout for the group and made numerous trips to Mumbai in planning for the attack.

The defendant

Tahawwur Rana was born in Pakistan and moved to Canada in the late 1990s, where he gained citizenship.

He spends most of his time in Chicago where he owns First World Immigration Services. He became friends with Headley when they were teenagers at a military boarding school outside Islamabad. According to the prosecution, Rana, who was arrested in 2009, provided cover for Headley by letting him open a branch office of his immigration company in Mumbai and to travel as a representative of the company. He also allegedly helped Headley make travel arrangements as part of a plot against a Danish newspaper that in 2005 printed cartoons of the Prophet Muhammad.