An Indian court has found a Pakistani man guilty of involvement in the 2008 Mumbai attacks, the first verdict delivered in a case that has worsened ties between New Delhi and Islamabad.

The court found Mohammad Ajmal Kasab, the lone surviving gunman from the Mumbai attacks, guilty of charges including waging war on India and murder. Sentencing will begin on Tuesday and he could now face the gallows.

Kasab was caught on tape strolling through Mumbai's main train station carrying an AK-47 rifle and a knapsack on his back, prosecutors say. Nearly 60 people were gunned down in the crowded station.

Kasab, wounded by police and arrested on the first night of the attacks, initially admitted his role and then said he had been framed.

At least 166 people, including foreigners and some of India's wealthy business elite, were killed by 10 Pakistani gunmen in a three-day rampage through some of Mumbai's best known landmarks including two luxury hotels and a Jewish centre.

Two Indian nationals accused of being members of the Pakistani militant group Lashkar-e-Taiba (LeT) and of conducting reconnaissance in Mumbai before the attack, were aquitted of all charges, according to the court.

The Mumbai attack prompted New Delhi to break off peace talks with Pakistan, saying Islamabad must first act against militants operating from its soil, including the LeT, of which Kasab is accused of being a member.