The Pentagon said that the US was withholding $50 million in payment to Pakistan due to Islamabad's insufficient counterterrorism action.
"The funds could not be released to the government of Pakistan at this time because the Secretary (of Defense Jim Mattis) could not certify that Pakistan has taken sufficient action against the Haqqani Network per the requirement in the FY 2016 National Defense Authorization Act," said the Pentagon in a statement on Friday, referring to a branch of the Afghan Taliban.
The funds being withheld is part of a Pentagon program called Coalition Support Fund, which aims to reimburse US allies and partners for their counterterrorism operations, Xinhua news agency reported.
In the Fiscal Year 2016, $900 million were marked for Pakistan, among which $550 million had already been reimbursed.
However, before withholding of $50 million announced on Friday, Mattis' predecessor Ash Carter decided last year to withhold another $300 million of the funding.
The announcement also came days after the US State Department in a report on global terrorism accused Pakistan of not taking "substantial action" against the Afghan Taliban or Haqqani.
The US in 2012 designated the Haqqani Network as a terrorist organization.
"It may be noted that the funds in question are a reimbursement of the expenses incurred by Pakistan towards achieving our common objectives in the fight against terrorism, and not an assistance," Pakistan's ambassador to the US Aizaz Ahmad Chaudhry, said in a statement, reports IANS.