By Andrew Quinn

WASHINGTON (Reuters) - The United States
Wednesday added the Pakistani Taliban to its list of foreign
terrorist organizations and set rewards of up to $5 million for
information leading to the capture of two of its leaders.

The steps mark Washington's toughest moves against the
Tehrik-i-Taliban, or Taliban Movement of Pakistan (TTP), a
group that claimed responsibility for the failed bomb plot in
New York's Times Square and is increasingly seen as a direct
threat to the United States.

"We should be very clear about this. The TTP is very much a
part of the most dangerous terrorist threat that the United
States faces," Daniel Benjamin, the State Department's
ambassador at large for counterterrorism, told a news
briefing.

Secretary of State Hillary Clinton's move, announced in a
note in the Federal Register, adds the TTP to a list of some 46
groups the United States deems involved in terrorism and
subjects to financial and travel sanctions.

Simultaneously, U.S. prosecutors charged TTP leader
Hakimullah Mehsud for a plot that killed seven CIA employees at
a U.S. base in Afghanistan last December, and U.S. officials
offered $5 million rewards for information leading to the
arrest of Mehsud and Wali-ur-Rehman, another senior TTP
commander.

"These individuals are dedicated terrorists and they are
attempting to extend their bloody reach into the American
homeland," said Robert Hartung, a senior State Department
security official.

U.S. military forces have tried to kill Mehsud using
unmanned aerial drones since the December attack. Both men are
believed to be in the tribal areas of northwestern Pakistan, a
haven for militant groups such as the TTP.

Benjamin called the TTP a "force multiplier" for al Qaeda,
expanding its reach around the world. The organization also has
ties to Punjabi militant groups and is suspected of being
behind most bomb and suicide attacks across Pakistan.

The TTP claimed responsibility for being behind the botched
bomb plot in New York's Times Square in May, an attack
analysts said showed the militant group sought to bring its
violent campaign to U.S. shores.

More recently, the TTP claimed responsibility for attacks
in Lahore in May that killed between 80 and 95 members of the
minority Ahmadi sect.

Washington sees Pakistan as a frontline state in its war
against the Taliban and al Qaeda and has named a number of
Pakistani militant groups to its blacklist, aimed at curtailing
support for terrorist activities and squeezing them
financially.

ALLIANCE OF MILITANT GROUPS

The TTP was formed in December 2007 as an alliance of
Pakistani militant groups to attack the Pakistani state. It
believes the government is illegitimate because it is helping
NATO and the United States in neighboring Afghanistan.

The group managed to wrest large swathes of territory in
the border area from government control before being driven
back. But it is widely considered to remain a potent threat.

In the December attack at the U.S. base in Afghanistan, a
Jordanian doctor who won the trust of CIA employees detonated a
bomb hidden under his clothing after entering the heavily-armed
compound outside Khost.

The U.S. Justice Department Wednesday charged Mehsud with
conspiracy to kill Americans overseas and conspiracy to use a
weapon of mass destruction -- in this case, a suicide bomber.

"Criminal charges are meant to deal with Hakmullah if he's
captured," said one U.S. official, who declined to be further
identified. "He can face justice in other ways too. That hasn't
changed."

The TPP hit the U.S. headlines again after the Times Square
bomb attempt, which saw a naturalized U.S. citizen of Pakistani
origin arrested after he parked a sport utility vehicle rigged
with a crude explosive device that included firecrackers and
propane gas tanks in New York's main tourist hub.

Faisal Shahzad later pleaded guilty and said he had
received bomb-making training and $12,000 from the TTP in
Pakistan to facilitate the bomb attempt. U.S. officials say
there is credible information to support the TTP's claim of
responsibility.
(Additional reporting by Jeremy Pelofsky in Washington Quinn;
Editing by Vicki Allen and Jerry Norton)