LAHORE, Pakistan, March 31, 2009 (AFP) - Pakistani Taliban chief Baitullah Mehsud claimed responsibility Tuesday for a bloody assault on a police academy that left a total of 12 dead - and warned of further attacks to come.

Mehsud, for whom the United States has posted a five-million-dollar reward, said the raid was to avenge a series of strikes by US drones on tribal areas along Pakistan's troubled border with Afghanistan.

"We claim responsibility for the attack," he told AFP by telephone from an undisclosed location.

Seven cadets, a civilian and four attackers died in Monday's daring raid on the police training school in the eastern city of Lahore, sparking fears that unrest is seeping out of the tribal badlands and into the heart of Pakistan. Assailants armed with guns, grenades and suicide vests shot their way into the academy in the morning, unleashing eight hours of gun battles until they were overpowered by security forces.

Mehsud, who was accused by the former government of masterminding the 2007 assassination of ex-premier Benazir Bhutto, is Pakistan's most-wanted militant and heads the feared Tehreek-e-Taliban Pakistan (TTP).

The US State Department has branded him a "key Al-Qaeda facilitator" in the semi-autonomous South Waziristan tribal area bordering Afghanistan.

Mehsud said he had set up a council of mujahedin (holy warriors) grouping different groups "to step up attacks on US and NATO forces in Afghanistan." He dismissed the US reward for his arrest.

"The maximum they can do is martyr me," he said. "We will exact our revenge on them from inside America."

His group is influential in both North and South Waziristan, as well as in the Bajaur tribal district to the north, which Pakistani security forces said they had effectively cleared last month following a major offensive.

Pakistan accused Mehsud loyalists of orchestrating a January 2007 attack on the Marriot Hotel in Islamabad which killed two people.

More than 330 people have been killed in at least 30 US drone strikes since August last year.

The US military does not usually confirm such attacks, but its armed forces and the US Central Intelligence Agency (CIA) operating in Afghanistan are the only ones to deploy drones in the region.

Meanwhile interrogators questioned dozens of people in connection with the shootout. Punjab province's police chief Khalid Farooq said 50 had been picked up.

"These people will now be interrogated," he added. "Things are moving in a positive direction but it is too early to say who was involved,"

A bearded man - whom interior ministry chief Rehman Malik said was Afghan - was arrested for allegedly trying to attack police outside the compound. Chief suspects for the attack are homegrown Islamist groups or Taliban and Al-Qaeda militants holed up in the tribal areas.

"We have obtained the fingerprints of those who blew themselves up and have been able to identify one of the attackers. But I can't give further details," said police official Wasim Ahmed Sayal.

Funeral prayers were said for seven of the dead with commandos deployed on rooftops around the Lahore compound to ensure security.

Mohammad Iqbal, a police instructor who suffered head and spinal injuries, speculated the attack was in revenge for a security operation against radicals holed up in an Islamabad mosque in July 2007.

"What I vividly remember is that they kept hurling grenades and fired from the second floor of the building where they later got trapped, and every time they shouted Allahu akbar (God is greater)," he told AFP from hospital. "My hunch is they took revenge on us for the Red Mosque operation."

British Foreign Secretary David Miliband condemned the attack and pledged international help to root out the extremist threat.