PESHAWAR, Pakistan (Reuters) - Pakistan plans to build a $30 million amusement park and outdoor activity centre on the edge of the northwestern town of Abbottabad, where U.S. special forces killed Osama bin Laden, an official said on Monday.

The private venture in the foothills of the Himalayas will include a zoo, water sports, a mini-golf course, rock climbing and paragliding, said Jamaluddin Khan, the deputy provincial minister for tourism.

"The project will take five years to complete," he told Reuters.

U.S. Navy SEALs killed the al Qaeda leader in 2011 in a secret raid that humiliated Pakistan's military - which has an academy nearby - and heavily strained ties between strategic allies Washington and Islamabad.

Some U.S. officials suspected that Pakistan's intelligence agencies had sheltered bin Laden. Pakistan dismissed the idea.

Authorities have demolished the large white villa where bin Laden lived, and senior regional official Khalid Omarzai said he had advised the government to build houses for local officials on the site.

"The government officers in Abbottabad have been facing residential problems and we have enough space now where bin Laden's compound was demolished," he said.

Omarzai added that some people suggested the government should build a public park on the land but he had rejected the idea because some might call it "Osama Park".