LAHORE, Nov 12 (Reuters) - A close associate of the former head of Lashkar-e-Taiba, a banned militant group fighting Indian rule in Kashmir, was killed during an attempted robbery in the Pakistani city of Lahore, police said on Sunday.

They said that Abdullah Mujahid was shot dead on Saturday by a gunman who had planned to rob him. The assailant was in hospital in a critical condition after having been hit in the abdomen during an exchange of fire with Mujahid.

Mujahid was a close aide of Hafiz Mohammed Saeed, who now heads a charity called Jamaat-ud-Dawa.

Saeed is better known as the founder of Lashkar, and the charity is said to be a front for the militant organisation. Police in the Indian city of Mumbai say Lashkar was involved in bomb attacks on commuter trains and stations that killed 186 people on July 11.

Jamaat-ud-Dawa said in a statement that Mujahid's killing was an act of terrorism, but police said it was attempted robbery.

"Mujahid was returning from morning prayers when his car was stopped by a gunman, who probably wanted to rob him," said senior police office Ahsan Younus.

"But Mujahid fired on the robber, hitting him in the abdomen, while the robber also fired, hitting Mujahid in the jaw and killing him instantly," he said.

Jamaat-ud-Dawa, which is on the government's watch list, has its headquarters in Lahore, the capital of the Punjab province.

Last month, a court released Saeed from detention after he was put under house arrest in August before he was due to address a rally. He was kept in custody because his behaviour was deemed to be having a negative impact on Pakistan's foreign relations.

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