Official sources confirmed that Zaki-ur-Rehman Lakhvi, a Lashkar operations chief named by India as the mastermind of the Mumbai attacks, was arrested in Muzaffarabad.
There is confusion, though, about when and where the arrest took place.
Another 14 Lashkar members were detained on Sunday afternoon, the sources said.
Indian officials say the sole Mumbai attacker captured alive has told them that Lakhvi recruited him for the mission and that Lakhvi and a Lashkar commander, Yusuf Muzammil, planned last month's assault.
Islamabad has denied any of its state agencies were involved in the attacks in India's financial hub, which left more than 170 people dead. But it says it is prepared to co-operate with India if authorities prove the attackers came from Pakistan.
Talat Hussain, the director of news at the local Aaj television network, told Al Jazeera: "Clearly the Pakistan government is responding to the international demand that any group that is using either Pakistan soil or areas under its control and is involved in activities beyond the pail of international law needs to be dealt with sternly."
The Associated Press news agency reported unnamed Lashkar fighters as saying that the camp was abandoned by the group in 2004 and had since been used by Jamaat-ud-Dawa, Lashkar's parent organisation, for education and charity work.
"There are reports that security forces including military personnel went into the area," Al Jazeera's Kamal Hyder reported from Islamabad.
"But the government is tight-lipped about it ... and so far there is nothing significant.
|Saeed, Lashkar's founder, has condemned the Pakistani action against Kashmir groups [AFP]
"There is speculation that these are preliminary investigations into what the activities of Jamaat-ud-Dawa in that particular region are all about."
News of the arrests emerged hours after Condoleezza Rice, the US secretary of state, urged Pakistan to act quickly and said there was evidence the country was used by "non-state actors" to mount the attacks.
"I do think that Pakistan has a responsibility to act," Rice said in a television interview.
Lashkar-e-Taiba has also denied any role in the deadly rampage, but the only surviving suspected attacker named one of the group's leaders as being behind the Mumbai plot, according to Indian officials.
Jamaat-ud-Dawa is run by Hafiz Muhammad Saeed, who founded Lashkar-e-Taiba in 1989.
He reportedly abandoned Lashkar when it was outlawed in Pakistan after India alleged it was behind a 2001 attack on the Indian parliament in New Delhi.
Saeed on Monday condemned the arrests, saying the Pakistan government had shown "weakness by targeting Kashmiri organisations."
"India wants to crush the independence movement of Kashmir using the Mumbai attacks as a pretext," he said in a statement.