Pakistani police on Friday rejected the self-defence claim of a US official who shot two men in broad daylight as a court extended his remand, pending a legal battle over diplomatic immunity.

In a move likely to further inflame ties with Washington, which says their man has diplomatic immunity and should be released immediately, a court in the eastern city of Lahore ordered Raymond Davis to be held in prison for 14 days.

On January, 27 he shot two Pakistani men and after his arrest told police he acted in self-defence because he feared they were trying to rob him.

The US consulate general in Lahore sent a vehicle to recover Davis, but it ran over and killed a third Pakistani man, before fleeing the scene.

US lawmakers have threatened to cut payments to Pakistan, the beneficiary of $7.5 billion dollars of aid and $2 billion in military aid, and Washington has warned that high-level dialogue is at risk unless Davis is freed.

In what has become a political time-bomb, the Pakistani Government is under enormous domestic pressure to see Davis go on trial, in a country awash with anti-American sentiment and where the killings have sparked angry protests.

"It has been proved that Raymond Davis committed murder," Lahore city police chief Aslam Tareen told a news conference.

"It was cold-blooded murder. Eye witnesses have told police that he directly shot at them and he kept shooting even when one was running away. It was an intentional murder," Tareen said.

He said there were no fingerprints on the triggers of the pistols found on the bodies of the two men and that tests showed the bullets were still in the magazines, and not the chamber.

"His plea has been rejected by police investigators," Tareen said, speaking in english. "He gave no chance to them to survive. That is why we consider it was not self-defence. We have proof it was not self-defence."

The US Embassy was not immediately available for comment.

But Tareen confirmed Davis has a diplomatic passport, the status of which has been fiercely debated.

On January, 28, the US Embassy identified him as a "staff member of the US consulate general in Lahore", the next day as a "diplomat assigned to the US embassy in Islamabad".

Under international laws, embassy diplomats have full diplomatic immunity whereas consulate officials are liable for detention in case of grave crimes.

Punjab government prosecutor Abdul Samad told reporters after on Friday's court appearance that Davis had been remanded for 14 days, pending further investigations and that the next hearing would be on February, 25.

The Police said he was being sent to Lahore's high-security Kot Lakhpat jail and that the defence demanded immunity on his behalf, saying he cannot be put on trial, and requested court proceedings be held in camera.

Only after prosecutors complete their report can formal charges be brought and a trial begun.

On February 17, the Lahore high court is expected to reconvene after giving the foreign ministry 15 days to answer on whether he has diplomatic immunity.

Few in Pakistan believe the reported former US special forces soldier, who was driving around with a gun, is a conventional diplomat.

Media reports claim he is a private security contractor or undercover agent. The US government has refused to confirm his name or precise job, other than that he belonged to the embassy's "technical and administrative" staff.

The Police told AFP they recovered a Glock pistol, four loaded magazines, a GPS navigation system and a small telescope from his car.