By Mubasher Bokhari

LAHORE, Pakistan (Reuters) - A Pakistani court on Wednesday indicted a CIA contractor on two counts of murder at a hearing held at a prison in Lahore, a police official said, in a move that may further strain relations between Pakistan and the United States.

Raymond Davis, 36, shot dead two Pakistanis in the eastern Punjab city on January 27 following what he described as an attempted armed robbery. He said he acted in self-defense and the United States says he has diplomatic immunity and should be repatriated.

"He has been indicted," a police investigator assigned to the case told Reuters from inside the jail.

(Created by Rebecca Conway; Editing by Chris Allbritton and Sanjeev Miglani)