Islamabad, Jan 30 (Agencies): The US demand to release an American diplomat, who shot dead two youths in Lahore, has been rejected by Pakistani authorities saying the matter would be handled according to the country’s laws.

Foreign Office spokesman Abdul Basit told a TV news channel on Sunday that the matter was already in court and the Punjab Police were investigating the shooting incident in Lahore on Thursday.

US Ambassador Cameron Munter raised the issue on Saturday with former premier Nawaz Sharif, whose PML-N party rules Punjab expressing regret over the death of Pakistani nationals in the Lahore incident.

He said the American should be handed over to US custody since he enjoyed diplomatic immunity.

Sharif "politely turned down the plea, saying that the matter was sub judice", the Dawn newspaper reported on Sunday.

PML-N spokesman Pervaiz Rashid told the media that Sharif believed the matter should be handled by the court.

The Foreign Office had rejected the US demand for freeing the American on Saturday.

The American shot and killed two armed youths who he claimed were trying to rob him.

A third Pakistani national died when he was hit by a US consulate car rushing to the aid of the American. The US embassy did an about-turn on the status of the American on Saturday.

Meanwhile, during a court appearance on Friday, the American said he had fired in self-defence. He is currently in police custody for six days.