The leaders of a US House-Senate negotiating panel have agreed to freeze $700 million in US aid to Pakistan until it offers to help in the fight against improvised explosive devices in the region, exerting more pressure on a troubled strategic ally.
Pakistan is one of the largest recipients of US foreign aid, and the cutback announced is only a small proportion of the billions in civil and military assistance it gets a year.
But it could presage greater cuts as calls grow in the United States to penalise Islamabad for failing to act against militant groups and, at worst, helping them, following the secret US raid on a Pakistan military town in which al Qaeda leader Osama bin Laden was killed.
Home-made bombs or improvised explosive devices (IEDs) are among militants' most effective weapons against US and coalition troops in Afghanistan as they struggle to fight a resurgent Taliban insurgency.
Many are made using ammonium nitrate, a common fertilizer shipped across the border from Pakistan. The freeze on US aid was agreed as part of a defense bill that is expected to be passed this week.
The United States wants "assurances that Pakistan is countering improvised explosive devices in their country that are targeting our coalition forces", Representative Howard McKeon, a House Republican, told reporters.
The United States has allocated some $20 billion in security and economic aid to Pakistan since 2001, much of it in the form of reimbursements for assistance in fighting militants.
But US lawmakers have expressed increasing frustration with Pakistan's efforts in the war.
There have been numerous proposals to make US aid to Pakistan conditional on more cooperation in fighting militants such as the Haqqani network Washington believes operate out of Pakistan and battle US troops in Afghanistan.
But Pakistan's civilian leaders have in the past warned against aid cuts, saying it would only harden public opinion against the United States.
It says it is doing all it can to fight al Qaeda and the Taliban and has lost thousands of soldiers since it joined the US-led war in 2001, some of them at the hands of coalition troops.
It has accused Nato of deliberately killing 24 Pakistani soldiers in an air strike near the Afghan border last month and shut down supplies for foreign troops in Afghanistan in anger.
US lawmakers said that many Afghan bombs are made with fertilizer smuggled by militants across the border from Pakistan into Afghanistan.
"The vast majority of the material used to make improvised explosive devices used against US forces in Afghanistan originates from two fertilizer factories inside Pakistan," Senator John McCain, a Republican, said in the Senate last week.
The provision freezing $700 million in aid was agreed upon by leaders of the armed services committees from both parties in the House and Senate, including McCain. It is part of compromise legislation authorizing US defence programs expected to be approved this week, McKeon said.
He said the bill would also require the Pentagon to deliver a strategy for improving the effectiveness of US aid to Pakistan.