Pakistan: US suspends $800m of military aid
The US says it is withholding some $800m in military aid to Pakistan.
White House Chief of Staff Bill Daley told ABC television that Pakistan had "taken some steps that have given us reason to pause on some of the aid".
He said the US raid that killed Osama Bin Laden in May had affected ties but he insisted the relationship "must be made to work over time".
The $800m (£500m) equates to about a third of the annual US security aid to Pakistan, US officials say.
In figures submitted to the International Monetary Fund last autumn, Pakistan's defence expenditure in its 2010-2011 budget was put at $6.41bn - an increase of $1.27bn on the previous year.
Speaking on ABC's This Week programme, Mr Daley accepted that Pakistan had been "an important ally in the fight on terrorism. They've been the victim of enormous amounts of terrorism".
He added: "It's a complicated relationship in a very difficult, complicated part of the world. Obviously, there's still 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 and we have no regrets over.
"Until we get through these difficulties, we will hold back some of the money that the American taxpayers have committed to give them."
The New York Times earlier quoted senior US officials as saying the suspension of military aid amounted to about one-third of the yearly US security assistance to Pakistan.
The paper said the move was to show US anger at the expulsion of US military trainers and to pressure Pakistan to step up its fight against militants.
The Times said some of the suspended aid had been earmarked as compensation for Pakistan's redeployment of troops to Afghan border areas to fight militants. Other cuts were in military equipment.
The defence department said in a statement: "The reduced presence of our trainers and other personnel means we can't deliver the assistance that requires training and support to be effective."
The BBC's Rajesh Mirchandani in Washington says this is clearly a strengthening of the US approach to Pakistan - more of the stick than the carrot - but there must be concern that taking away the money will stop the Pakistanis co-operating at all.
Washington still regards Pakistan as vital in the fight against al-Qaeda and Taliban militants who use safe havens in Pakistan's tribal regions on the Afghan border.
But with Bin Laden known to have been living undetected almost next door to a major Pakistani military academy in Abbottabad, many in the US Congress have questioned the value of the US aid.
The BBC's Aleem Maqbool in Islamabad says Pakistan military sources have said they have heard nothing official of the aid suspension but that they have in any case been encouraging the US to divert funds from military to civilian programmes.
This may be an attempt to save face, our correspondent says, as the US move will undoubtedly hurt the Pakistani military.
Pakistan's former ambassador to the US, Meleeha Lodhi, told the BBC the US move would be counterproductive.
She said: "Washington is going to be left without any influence with the Pakistan army and with the people of Pakistan because this will be seen as an action that will punish Pakistan rather than provide an incentive for cooperation.
"This is not the way to rebuild a relationship that has been in a state of disrepair for several months."
In a sign of how difficult Pakistan-US relations have become, the top US military officer Adm Mike Mullen last week suggested the Pakistani government had "sanctioned" the killing in May of journalist Saleem Shahzad.
Mr Shahzad was kidnapped near his home in Islamabad. His body was found two days later in Punjab province.
Pakistan Information Minister Firdous Ashiq Awan said Adm Mullen's statement was "extremely irresponsible and regrettable".
She said it would cause difficulties in relations between the sides and prove a setback to the war against terror.
The increasing US drone attack on militants inside Pakistan along the Afghan border is also a continuing source of antagonism.
British military trainers were also withdrawn at the request of the Pakistani government last month.