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By Zeeshan Haider

SHERGARH, Pakistan, May 15 (Reuters) - Members of a Pakistani Islamist charity on a U.N. terrorist watch list are helping tens of thousands of people displaced by an army offensive against Taliban militants, aid officials said on Friday. More than 900,000 people have fled from the offensive in the Swat valley, northwest of Islamabad, launched last week in a government attempt to roll back expanding Taliban influence.

In the settlement of Shergarh, south of Swat, dozens of packed buses, vans and trucks were bringing people out on Friday and dropping many off at a welfare camp run by Islamists.

Mian Adil, deputy chairman of a previously unheard of group running the camp, said members of the Jamaat-ud-Dawa (JuD) charity were helping feed and supply tens of thousands of the displaced.

"There are restrictions on the Jamaat-ud-Dawa but not on welfare activities," Adil told Reuters.

The United Nations put the JuD on a terrorist list in December, saying it was a new alias for the banned Lashkar-e-Taiba (LeT) militant group.

India accused the LeT of masterminding a militant assault on Mumbai in November in which 166 people were killed.

Adil's group is called the Falah-i-Insaniat Foundation (Foundation for the Welfare of Humanity).

He said it was founded three years ago but he declined to comment when asked if the Falah-i-Insaniat Foundation was a new name for the JuD or if he was a member of the JuD.

"There is no harm in providing a platform to members of the Jamaat-ud-Dawa for serving humanity to seek Allah's blessing .... their members are working with us," Adil said.

Until recently, the JuD had an extensive welfare network across Pakistan funded by donations. It played a major role in helping survivors of a 2005 earthquake in northern mountains that killed 73,000 people.

Authorities raided JuD offices and detained scores of activists as tension with India rose sharply after the Mumbai attacks. The government also took over the management of many of the group's welfare activities.

"SAME SET-UP"

The Falah-i-Insaniat Foundation is running several camps and food stations for the displaced, including one in Islamabad where another aid official said the JuD was behind the foundation.

"It's the same set-up," said Maqbool Elahi, the foundation official running the Islamabad camp.

"We can't operate under the name Jamaat-ud-Dawa but we want to continue our service to the people," he said.

At Shergarh, aid workers cooked rice in huge pots and served food and juice to dozens of weary people coming out of Swat.

The charity was also running a small dispensary and doctors, including a female doctor for women, were treating the sick.

Two members of the foundation stood by the road waving a black and white Islamist flag to bring people in.

Adil said his group had fed more than 90,000 people since May 3. It also provided free transport for people who wanted to go to camps run by the government and the United Nations.

Political analyst Hasan Askari Rizvi said it was unlikely the government would try to stop the group from helping people.

"There is no law that bans people, even if they are members of a banned group, from creating a new organisation unless they are convicted of a crime," Rizvi said.

"The government is unlikely to stop them from doing their welfare activities unless they engage in militancy," he said.

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