* Pakistani faces sentencing on Tuesday
* India says Pakistan must not export terrorism
* Analysts see little impact on India-Pakistan ties (Adds details on other accused, paragraph 9)
By Rina Chandran
MUMBAI, May 3 An Indian court on Monday found a Pakistani man guilty on 86 charges from the 2008 Mumbai attacks, including waging war on India and murder, in a trial that strained ties between New Delhi and Islamabad.
Mohammad Ajmal Kasab, the lone surviving gunman from the attacks that killed 166 people, will be sentenced on Tuesday and could face the gallows.
"It was not a simple act of murder. It was war," judge M.L. Tahiliyani said in a summary of the 1,522 page judgment. "This type of preparation is not made by ordinary criminals. This type of preparation is made by those waging war."
India accuses Pakistan-based militants of organising the attacks, saying Islamabad is failing to act against those who organised the raids. Pakistan denies involvement and says it is prosecuting seven suspected militants for their role.
"The judgment itself is a message to Pakistan that they should not export terrorism to India," Indian Home Minister Palaniappan Chidambaram told reporters after the court decision.
New Delhi broke off peace talks after the attacks, saying Islamabad must first act against militants operating from its soil, including Pakistan-based group Lashkar-e-Taiba (LeT), of which Kasab is accused of being a member.
The verdict came days after the prime ministers of India and Pakistan held talks in Bhutan and asked officials to take steps to normalise relations, signalling a thaw in ties that analysts say should not be affected by Monday's verdict.
One risk to normalising relations would be another major militant attack in India and the ensuing political pressure that could force the Indian government to break off dialogue again.
India had charged 38 people in connection with the attacks, most of them living in Pakistan. On Tuesday, the court found 20 of them guilty of conspiracy, including LeT founder Hafiz Mohammad Saeed and LeT commander Zaki-ur Rehman Lakhvi.
It acquitted two Indians accused of being LeT members and of conducting reconnaissance in Mumbai for lack of evidence.
Pakistani government officials were not immediately available for comment. Yahya Mujahid, a spokesman for Saeed, denied involvement and said the acquittal of the Indians "has also raised many questions". ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a FACTBOX on the accused see [ID:nSGE63T0B4] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CAUGHT ON TAPE
Many foreigners and some of India's wealthy business elite, as well as poor train commuters, 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.
Kasab, 22, was filmed walking through Mumbai's main train station carrying an AK-47 rifle and a knapsack on his back. Nearly 60 people were gunned down in the crowded station.
Police arrested Kasab, who was wounded, on the first night of the attacks. He initially admitted his role but later said he had been framed.
On Monday, Kasab, dressed in white, stood but did not react to a summary of the verdict read out to him in Hindi by the judge and then sat down.
He was also found guilty of offences ranging from damage to public property to entering the country without a passport.
Crowds gathered outside the courtroom, which was protected by armoured vehicles and snipers, before the verdict was announced. Relatives spoke of their anguish and their expectations.
"You should understand our feelings. He should be punished immediately," Kavita Karkare, the wife of a police official killed in the attacks, told CNN/IBN TV before the judgment. (Additional reporting by Zeeshan Haider in Islamabad; Writing by C.J. Kuncheria; Editing by Alistair Scrutton and Nick Macfie)