The Pentagon said it is withholding $300 million in military aid because Pakistan has not taken "sufficient action" against the Haqqani network.
The aid was withheld despite "the significance of the sacrifices that the Pakistani military has undertaken" fighting terrorism since 2014, said Pentagon spokesman Adam Stump on August 4.
The Haqqani network, labeled a terrorist organization by the United States, operates in both Afghanistan and Pakistan.
Congress stipulated that $300 million of the $1 billion in U.S. military aid authorized to go to Pakistan in 2016 could be transferred only after Secretary of Defense Ash Carter certified that Pakistan had made satisfactory progress against the group.
The deadline for payment was June 30, and Carter let the deadline pass without authorizing the funds.
The Washington Post first reported the decision late on August 3. This was the first time that certification from the secretary of defense was required for military aid to Pakistan.
"We have taken up the fight against terrorism," Pakistani Foreign Office spokesman Nafees Zakaria said in Islamabad on August 4.
"These reimbursements enable the United States to support Pakistan's ongoing counterterrorism efforts in a manner that serves shared interests of both the countries."