Relations between the two countries have been frayed over the past decade, with US officials frustrated by what they term Islamabad’s unwillingness to act against groups such as the Afghan Taliban and the Haqqani network.
“The funds could not be released to the Government of Pakistan at this time because the Secretary has not yet certified that Pakistan has taken sufficient action against the Haqqani network,” Pentagon spokesman Adam Stump said on Wednesday.
The $300 million comes under the Coalition Support Fund (CSF), a US Defence Department program to reimburse allies that have incurred costs in supporting counter-terrorism and counter-insurgency operations. Pakistan is the largest recipient.
“This decision does not reduce the significance of the sacrifices that the Pakistani military has undertaken over the last two years,” Stump added.
According to Pentagon data, about $14 billion has already been paid to Pakistan under the CSF since 2002.
The decision by the Pentagon is a sign that while it sees some progress by Pakistan in its military operations in North Waziristan, much work remains.
Pakistan rejects harbouring militants but says there are limits to how much it can do as it is already fighting multiple Islamist groups and is wary of a “blowback” in the form of more terror attacks on its soil.
“(The) Coalition Support Fund is one of the many cooperative arrangements between Pakistan and the United States to pursue common objectives,” said Nadeem Hotiana, a spokesman for the Pakistani embassy in Washington.
Relations between the United States and Pakistan were tested in May by a US drone strike that killed Afghan Taliban chief Mullah Akhtar Mansour on Pakistani soil.
There has been growing resistance in the US Congress to sending money to Pakistan. Many lawmakers have expressed concern about its nuclear program, commitment to fighting terrorist organisations and cooperation in the Afghanistan peace process.
In March, Republican Senator Bob Corker said he would use his power as the chairman of the Senate Foreign Relations Committee to bar any US funding for Islamabad’s purchase of $700 million of Lockheed Martin Corp F-16 fighter jets.