"Saeed recently visited Pakistan Occupied Kashmir (POK) and asked the recruiters to motivate the homeless and jobless youths of Kashmir and POK for joining militancy after the floods," highly placed sources in the Intelligence Bureau (IB) told IANS, speaking on condition of anonymity.
"The LeT thinks it's the best time for recruitment as many youths have become jobless due to the floods in the state," the sources added.
The Sep 7 floods wreaked havoc in Kashmir and POK, leaving hundreds dead and thousands homeless.
The IB alert has been shared with several states, including Delhi and Jammu and Kashmir. It also says that LeT "may target monuments and embassies located in Delhi".
"He (Saeed) is an influential personality, his visit definitely would have boosted the moral of the recruiting men on the other side of the border. Idle men are best to employ," security expert Major General Prabir Kumar Chakravarti (retd) told IANS.
"The rehabilitation of such youths are important. The government should look into this," Chakravarti added.
Saeed, one of India's most wanted terrorists, is a major irritant in the already strained relationship between India and Pakistan as New Delhi has expressed its resentment over his not being brought to book for the Mumbai attack, which claimed nearly 170 lives and injured hundreds.
Saeed runs the Lahore-based Jamaat-ud-Dawa (JuD), which he claims is a humanitarian charity. The JuD has been blacklisted by the US, which has described it as a "foreign terrorist organisation".
According to sources, POK, spread over 13,297 square kilometres, has at least a dozen training camps of the LeT and the Indian Mujahideen (IM).
Sources also said the militancy might intensify in Jammu and Kashmir, where assembly polls are due in Nov-Dec.
Officials also believed that conducting the election soon after the floods would be a major challenge for the security forces.