The US military has made a final decision to cancel $300m in aid to Pakistan, the Pentagon says, citing Islamabad's perceived failure to take decisive action against armed groups in the country.
The Coalition Support Funds were part of a broader suspension in aid to Pakistan announced by President Donald Trump at the start of the year, when he accused Pakistan of rewarding past assistance with "nothing but lies and deceit".
The Trump administration says Islamabad is granting safe haven to fighters who are waging a 17-year-old war in neighbouring Afghanistan, a charge Pakistan denies.
"Due to a lack of Pakistani decisive actions in support of the South Asia Strategy, the remaining $300m was reprogrammed," Pentagon spokesperson Lieutenant Colonel Kone Faulkner said on Saturday.
"We continue to press Pakistan to indiscriminately target all terrorist groups," said Faulkner before adding that the aid amount would be used on "other urgent priorities" following Congress' approval.
A Pakistani official, speaking on the condition of anonymity, said he was unaware of a formal notification of the US decision on assistance but said one was expected by the end of September, according to media reports.
'Likely to dent relations'
Kamal Hyder, Al Jazeera's Pakistan correspondent
"After the Trump administration took over, the president announced his South Asia policy in which he came down very hard on Pakistan. Islamabad has categorically rejected that US policy.
"This particular move by the US is likely to dent relations. Pakistan is also living up to its promise of trying to forge a brand new foreign policy initiative in which it'll try to improve relations with its neighbours and reduce its reliance on the US."
The announcement came just weeks after Pakistan's newly elected Prime Minister Imran Khan took office.
Khan has repeatedly blamed Pakistan's participation in the US-led "anti-terror campaign" for the surge in attacks on home soil over the last decade and has vowed to rebalance Islamabad's relationship with Washington.
The disclosure also comes just days ahead of an expected visit to Islamabad by US Secretary of State Mike Pompeo and the top US military officer, General Joseph Dunford.
Just over a week ago, a telephone conversation between Pompeo and Khan stirred up controversy, with Islamabad calling Washington's account of the discussion "factually incorrect".
Pakistan Foreign Office refuted the US statement which said "Pompeo raised the importance of Pakistan taking decisive action against all terrorists operating in Pakistan".
"The impression that has been given in their press release, which mentions terrorists operating in Pakistan, is in contrast with reality. And I say this with full confidence," said Pakistan Foreign Minister Shah Mahmood Qureshi.
Some analysts warn there may be no real way to pressure Islamabad and say a suspension in aid could see the US lose crucial influence over Pakistan which will instead look to other countries for support, particularly its longtime ally China.
"The announcement is to put Pakistan under pressure. Pakistan is expected to give a very tough response and also take it up with Pompeo when he's in Islamabad," Mateen Haider, a defence and security analyst, told Al Jazeera.
"The cooperation between Islamabad and Beijing is also increasing rapidly, particularly in the field of defence and security. Pakistan is now buying most of its defence equipment from China instead of the US and that strategic partnership is upsetting Washington."
Pakistan has fought fierce campaigns against homegrown armed groups, and says it has lost thousands of lives and spent billions of dollars in its long-time war against them.
But US officials accuse Islamabad of ignoring or even collaborating with groups, which attack Afghanistan from safe havens along the border between the two countries.
The White House believes that Pakistan's Inter-Services Intelligence agency and other military bodies have long helped fund and arm the Taliban for ideological reasons, but also to counter rising Indian influence in Afghanistan.
It also believes that a Pakistani crackdown could be pivotal in deciding the outcome of the long-running war in Afghanistan.