Islamabad, Pakistan (CNN) -- News that the American accused of killing two Pakistani men is a CIA contractor has intensified an already highly charged situation in Pakistan.
"Raymond Davis is a CIA Guy," read the headline in the Daily Times newspaper Tuesday.
Some newspapers cited unnamed sources to link Davis with "terrorist activity" and the Pakistani Taliban.
"CIA agent Davis had ties with local militants," read the headline in The Express Tribune.
The Tribune quoted an unnamed "senior police official" as saying Davis was suspected in masterminding terrorist activity.
"His close ties with the TTP (The Pakistani Taliban) were revealed during the investigations," the paper quoted the police official as saying. "Davis was instrumental in recruiting young people from Punjab for the Taliban to fuel the insurgency."
The report doesn't specify what evidence gathered in the police investigation linked Davis to the Taliban or to terrorist activity.
Monday's revelation that Davis was working for the U.S. intelligence agency when he shot two men -- one of them in the back, according to Lahore police -- has already inflamed hard-line clerics and an angry public that wants the American tried in a Pakistani court.
In protests since Davis' arrest last month, hard-line Pakistani clerics have condemned the shootings and demanded that the government not release the American.
Despite the revelation of Davis' true line of work, U.S. officials on Monday renewed their argument that he has diplomatic immunity and must be released.
U.S. officials notified Pakistan that Davis had been posted to the U.S. Embassy in Islamabad in January 2010, U.S. officials said. Pakistan's only recourse under international law is to order Davis out of the country, according to a senior U.S. official who briefed reporters on background Monday.
Davis was jailed January 27 after fatally shooting two men who pulled up to him on a motorcycle in a bustling Lahore neighborhood.
U.S. officials and Lahore police said Davis told them he shot the men in self-defense. Evidence showed the two men may well have been robbers, according to police who found cash and cell phones linked to a robbery reported earlier that day.
But Lahore's police chief, Aslam Tareen, has said witnesses told police that Davis kept firing, even when one of the men was running away.
The 36-year-old Davis is a former member of the U.S. Army special forces and had been employed by security firm XE Services, previously known as Blackwater.
Davis began working for the CIA nearly four years ago. He was assigned to Pakistan in late 2009. He was living with other security personnel at a safehouse in Lahore before the shooting incident.
On Monday, a U.S. government official also said that Davis was a CIA contractor providing security for CIA officers.
Before Monday, U.S. officials had described Davis only as an employee who was attached to the U.S. Embassy in Islamabad and who was working at the U.S. Consulate in Lahore at the time of the shootings.