The Obama administration will deny training and equipment to Pakistani army units believed to have killed unarmed prisoners or civilians during anti-Taliban offensives, The New York Times reported Oct. 22.
The aid cuts were just the latest in a series of developments highlighting the uneasy relationship between Washington and its vital ally, sometimes seen as hindering the fight against Al-Qaeda.
The White House has not yet informed Pakistan of its decision even though senior Pakistani officials are in Washington for a series of talks this week, the Times said, citing officials from both countries.
It comes just as the two nations seek to smooth over their latest crisis after NATO helicopters killed Pakistani troops along the Afghanistan-Pakistan border and Islamabad responded by blocking the main transit point for US war supplies.
President Barack Obama's administration has "a lot of concern about not embarrassing" the Pakistani military, a senior official told the Times.
Some U.S.-backed Pakistani Army and special operations troops who have been in action against Taliban fighters in the Swat Valley and South Waziristan along the lawless border region will be affected by the decision, the newspaper said.
The move would be in line with a law known as the Leahy Amendment, which requires the United States to cut off aid to foreign military units found to have committed gross human rights violations.
Units from Indonesia and Colombia have been affected in the past, but this would be the first time it would hit a country of such strategic importance as Pakistan. It receives about two billion dollars in U.S. aid for its military each year.
"I told the White House that I have real concerns about the Pakistani military's actions, and I'm not going to close my eyes to it because of our national interests in Pakistan," the amendment's author Senator Patrick Leahy told the Times.
A senior Pakistani official involved in discussions about the matter told the newspaper that the United States had expressed concern about reports of hundreds of extrajudicial killings committed by the Pakistani military.
Pakistan was addressing the issue, he said.
But the official noted that so far, the U.S. government "has not threatened us with withholding of assistance or training for any of our military units on these grounds."