|The shooting incident has set off protests in Pakistan, where anti-US sentiment has long run high [EPA]
US congress members have threatened to stop aid to Pakistan unless it releases an American detained over shooting deaths of two Pakistani men.
As the US increased pressure on Pakistan on Tuesday, it had already warned about the risk to high-level dialogue unless Pakistan released Raymond Davis, a US government employee.
Davis was arrested on January 27 after shooting two Pakistanis. He said he acted in self-defence fearing they would rob him.
A third Pakistani was run over and killed by a US consulate vehicle that had come to assist Davis, according to police.
The incident set off protests in Pakistan, where anti-US sentiment has long run high.
Shumaila Faheem, the widow of one of the two men who was shot dead by Davis, committed suicide on Sunday by taking poison.
Many observers have questioned whether Davis was an ordinary diplomat.
Three members of the US House of Representatives drove home the point on a visit to Pakistan, telling Yusuf Raza Gilani, the Pakistani prime minister, that congress was working on its budget and looking for areas to cut.
"It is imperative that they release him and there is certainly the possibility that there would be repercussions if they don't," John Kline, a Republican from Minnesota, said on his return.
"My guess is there would be a lot of support for such an amendment, frankly, because of the outrage of detaining an American with diplomatic immunity."
Asked if aid would be at risk if Davis stayed in custody, Buck McKeon, who heads the House Armed Services Committee, said: "It very well could be."
In an interesting twist in Davis' case, prosecutors recommended that an espionage case be also registered against him, reports said on Tuesday.
"Keeping in view the nature of the case it is strongly recommended that a case of espionage be registered against Davis," the prosecution branch of the Punjab police has written in an official letter to the investigation branch.
"During the course of investigation, police retrieved photographs of some sensitive areas and defence installations from Davis' camera," a source told the Pakistani newspaper, the Express Tribune, requesting anonymity.
"Photos of the strategic Balahisar Fort, the headquarters of the paramilitary Frontier Corps in Peshawar and of Pakistan army's bunkers on the eastern border with India were found in the camera," the source said.
The police said they recovered a digital camera, a Glock pistol and a phone tracker along with a charger from Davis after his arrest.
The Punjab government considers Davis a security risk after the recovery of the photos of sensitive installations, the Express Tribune source said.
"Punjab chief minister Shahbaz Sharif has told American diplomats that the matter is sub judice and only the Lahore high court would decide whether or not Davis was entitled to diplomatic immunity," an official source told the newspaper.
Sharif made the statement at a meeting with the US diplomats who sought Davis' immediate release.
Citing a letter written by Rehman Malik, interior minister to the Punjab government, the diplomats said that Davis had diplomatic immunity.
Sharif, however, denied his government had received any letter from the interior minister, according to the sources.
Sharif advised the diplomats to wait for the Lahore high court ruling on the diplomatic status of Davis.
A security official also told the Express Tribune that Davis' name did not figure on a list of US diplomats presented by the American embassy to the ministry of foreign affairs on January 25.
But interestingly, his name figured prominently on another list submitted by the embassy to the ministry on January 28.
Husain Haqqani, Pakistan's ambassador to Washington, wrote on micro-blogging service Twitter that relations between the two countries "have proved resilient in the past" and that the "strategic partnership will endure, notwithstanding challenges".
Barack Obama's administration has declared combating anti-Americanism and reducing the allure of extremists in Pakistan to be a top priority.
Congress in 2009 approved a five-year, $7.5bn aid package meant to build schools, infrastructure and democratic institutions as Pakistan ended a decade of military rule.
In October, the US administration proposed another $2bn in assistance for Pakistan's military, often seen as the principal power centre in the country.