Harakat ul-Mujahedeen, or "Movement of the Holy Warriors,'' said it was closing down its seven offices under government orders. The movement is one of the largest militant organizations fighting Indian soldiers in the disputed Kashmir region and was declared a terrorist organization by United States years ago.
"The government has ordered us to close because of American pressure,'' said a Harakat commander, Sajjad Shahid.
The group also has strong ties to Afghanistan and several of its members were trained there. Afghanistan is the base of alleged terrorist mastermind Osama bin Laden, sought by the United States in the Sept. 11 terrorist attacks against the World Trade Center and the Pentagon.
Scores of Harakat volunteers are believed to be fighting alongside the Taliban against the northern-based Afghan opposition forces.
Two key leaders of the group, Maulana Fazalur Rehman Khalil and Farooq Kashmiri, went into hiding soon after the Sept. 11 attacks. Both of them fought with Afghan resistance forces against the Soviets in the 1980s.
Harakat's assets were frozen Monday by President Bush along with those of 26 other organizations and individuals in connection with the worldwide campaign against terrorism.
A second Pakistan-based organization, the Al-Rashid Trust, was on Bush's list. Pakistan's State Bank froze its assets here this week, but the trust is technically allowed to continue since it has not been declared a terrorist organization.
On Saturday, several Harakat members were seen removing their belongings from their main office in Muzaffarabad, the capital of Pakistani-ruled Kashmir.
The government's move to shut down the militant organization is likely to enrage other groups waging an insurgency in Indian-controlled Kashmir. Attique-ur-Rehman, another commander of the Harakat group, vowed to resist the government order.
"Any Pakistani ruler who will go against us won't stay in power for long,'' he threatened.
The United States has courted Pakistani support for its campaign against bin Laden, who is protected by Afghanistan's hard-line Islamic Taliban movement.
Pakistan has maintained close ties to Afghanistan and is the only country to recognize the Taliban as the legitimate government of the country after Saudi Arabia and the United Arab Emirates broke ties.