State Department officials said they are holding back the aid as an incentive for Pakistan to take "decisive action" to rid its lands of terrorist safe havens. It also placed the country on a watch list of nations failing to protect religious freedom.
"Working toward enduring peace requires mutual respect and trust along with patience and persistence," Pakistan's Foreign Ministry said in a statement. "Arbitrary deadlines, unilateral pronouncements and shifting goal posts are counterproductive in addressing common threats."
In an interview Thursday with the Geo News channel, Foreign Minister Khawaja Muhammad Asif said that the United States was now neither a friend nor ally but "a friend who always betrays."
Pakistan's opposition, meanwhile, called for concrete actions to retaliate.
Opposition leader Imran Khan said Pakistan should "delink" itself from the United States after its humiliation "by an ungrateful Donald Trump." Khan has called for Pakistan to expel some U.S. diplomatic personnel and cut off supply routes for the U.S.-led coalition forces from the port city of Karachi to landlocked Afghanistan, as well as close its airspace to U.S. forces.
Analysts fear the escalating tension could have a long-standing impact on regional security and the United States' ongoing efforts in Afghanistan, where troop levels now stand at 14,000.
"There is little doubt that both are on a collision course and their bilateral relationship is set for a very rough ride if back-channel efforts are not made to address the U.S. concerns," said Vinay Kaura, an Indian security analyst.
The Trump administration's move came after what a senior State Department official called "numerous conversations" with the Pakistanis over several months, along with visits by Secretary of State Rex Tillerson and Defense Secretary Jim Mattis. The United States has repeatedly pressed the Pakistanis to do something about Taliban and Haqqani network militants operating inside Pakistan who launch attacks against coalition forces in Afghanistan, officials said.
Much to the "immense" frustration of the United States, Pakistan continued to deny that there are terrorist safe havens in the country and that they have little leverage over them, the official said, speaking to reporters on the condition of anonymity because she was not authorized to speak publicly.
"So they know exactly what it is that we've asked of them," the official added. "We cannot continue business as usual with the Pakistani government if they are not going to partner with us."
The tension between the two governments was evident during a meeting between Asif and national security adviser H.R. McMaster in October at the White House, Asif said in Thursday's TV interview.
McMaster, an Army lieutenant general who served in Afghanistan, has been a key driver of the Trump administration's efforts to strengthen its stance against Pakistan.
"I met McMaster and he told me that 'you make promises but don't keep them, and our trust level is quite low,' " Asif said. The foreign minister responded that his country had little trust in the United States as well. The meeting lasted for less than half an hour, he said.
The State Department also announced Thursday that it was placing Pakistan on a watch list of countries failing to protect religious freedom, a modest gesture that fell short of the more severe designation "Countries of Particular Concern" accorded to nations such as North Korea and Iran.
On Friday, Pakistan's Foreign Ministry rejected the designation, saying it was not based on objective criteria.
Officials have said the designation was due to harassment of religious minorities and tolerance of violence centering on its blasphemy law.
Pakistan and the United States settled into an uneasy alliance after the terrorist attacks of Sept. 11, 2001, with Pakistan arresting al-Qaeda operatives and allowing drone attacks inside its airspace. But the relationship has grown more contentious since 2011, when U.S. Special Forces killed al-Qaeda leader Osama bin Laden in a raid in the military garrison town of Abbottabad.
The United States has given Pakistan more than $20 billion in reimbursements and military assistance since 2002, but that aid has diminished over the years, to the point that Pakistani officials have insisted that its suspension will have minimal impact.
A senior administration official said the total amount of military aid being suspended is about $2 billion, including $900 million in coalition support funds designated to reimburse Pakistan for fighting militants.
The official, who spoke on the condition of anonymity under ground rules for briefing reporters, said the suspension was born of frustration with watching Pakistan mount operations against militants hostile to Pakistan but offer safe haven to groups that attack Americans.
"The suspension is arguably more significant as a signal of Washington's discontent than as an act of financial deprivation," said Joshua T. White, an Asia analyst who was director of South Asian affairs at the National Security Council during the Obama years.
"The Trump administration has likely sketched out an escalation strategy and would be wise to pause after Thursday's announcement to give Pakistan the opportunity to quietly address U.S. concerns."
Gowen reported from New Delhi. Carol Morello contributed to this report from Washington.