The US is withholding some $800 million in aid to Pakistan, almost a third of the $2.7bn in security assistance it provides each year to the South Asian nation, Barack Obama's chief of staff has confirmed.
Relations between the key allies, always tricky, have drastically deteriorated since US commandos shot and killed al-Qaeda leader Osama bin Laden on May 2 in a Pakistani garrison town, sowing distrust on both sides.
Last month, Hillary Clinton, the secretary of state, warned that the US would slow down military aid to Pakistan unless it took unspecified steps to help the US.
Now, it appears, it has, as William Daley, the president's chief of staff, confirmed a
New York Times report that the administration was suspending and, in certain cases, cancelling some $800m of military aid.
"They've taken some steps that have given us reason to pause on some of the aid which we're giving to the military, and we're trying to work through that," Daley told ABC TV station's This Week With Christiane Amanpour programme.
"The truth of the matter is, our relationship with Pakistan is very complicated.
"Obviously there's still a lot of pain that the political system in Pakistan is feeling by virtue of the raid that we did to get Osama bin Laden.
"Something that the president felt strongly about. We have no regrets over.
"The Pakistani relationship is difficult, but it must be made to work over time. But until we get through these difficulties, we'll hold back some of the money that the American taxpayers have committed to give."
The suspended aid includes about $300m to reimburse Pakistan for some of the costs of deploying more than 100,000 soldiers along the Afghan border, according to the
New York Times, which broke the story late on Saturday.
In addition, the newspaper said, hundreds of millions of dollars in training assistance and military hardware are also being withheld.
Intensifying debate
The moves come amid intensifying debate within the Obama administration about how best to change the behavior of one of Washington's most important counterterrorism allies.
While Pakistan is a crucial ally in the hunt for al-Qaeda and a major supply route to provision US troops in Afghanistan, its powerful military intelligence services have long been suspected of ties with armed Muslim groups.
Some US politicians remain sceptical of Pakistan's commitment to antiterrorism efforts and have been pleading Obama to cut off aid.
On June 23, Clinton told the Senate Foreign Relations Committee that unless certain unspecified steps were taken by Pakistan, the United States was not "prepared to continue providing [aid] at the pace we were providing it."
"We're trying to ... play this orchestra the best we can, where we ... look in one direction and say to those who we think are largely responsible for the difficulties we know that exist within Pakistan ... you can't continue doing that," she said.
But Clinton reiterated that the US did not believe top Pakistani officials knew that bin Laden was living in Abbottabad, just north of Islamabad, under the noses of the military.
"In looking at every scrap of information we have, we think that the highest levels of the government were genuinely surprised," she said.
Fearful of damage
The US clearly hopes to gain some leverage over Pakistan by withholding military aid but will be fearful of doing further damage to its ties with Pakistan.
Pakistan's military is a revered institution that has long played a key role in the country's politics and is acutely sensitive to charges that it is kowtowing to the US.
Recently, Pakistan ejected more than 100 US army special forces trainers.
Equipment used by those trainers, like rifles, body armor, and ammunition and bomb disposal gear is among the military gear now being withheld, according to the
New York Times.
Other equipment, like night-vision goggles, radios and helicopter spare parts, is being withheld because Pakistan denied visas to the American trainers needed to operate the equipment, the report said.
Military sales to Pakistan, like F-16 fighters, and non-military aid, has not been affected, according to officials interviewed by the US newspaper.
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