US warns Pakistan to fight Taliban or lose funding: WSJ

The warnings from Obama administration officials have raised the stakes in their ongoing strategic dialogue here after months of growing tensions over US criticism of Islamabad's perceived unwillingness to take stronger action against the Afghan Taliban and its allies, it said

The White House also has decided not to provide equipment or training to Pakistani Army units that have been accused of killing prisoners or civilians, the Journal said citing a military official. That move follows a US investigation into a recent video that showed Pakistani military personnel killing a prisoner. About a half dozen units will be affected by the new policy, reported first by The New York Times.

On Wednesday, President Barack Obama dropped by a meeting of his top advisers and Pakistani officials, including the army chief, Gen. Ashfaq Kayani, and Foreign Minister Shah Mahmood Qureshi. A White House statement issued afterwards highlighted the need to "increase pressure on extremist safe-havens" but didn't repeat previous White House praise of Islamabad fighting militants.

Funding represents the greatest US leverage over Islamabad, the Journal noted. US military and civilian funding for Pakistan totalled more than $3.5 billion over the last year, according to congressional estimates.

But concerns have risen in Congress about how that money is spent and whether Pakistan is obstructing US goals in Afghanistan. The administration said this week it intends to increase annual grants for Pakistan to buy US defence equipment, but officials warned that Congress could pare that back.

Administration and congressional officials also said hundreds of millions of dollars a year in so-called Coalition Support Fund payments, which reimburse Pakistan for its military operations against militants, could face future cuts, the Journal said.

The US hasn't made any reimbursement to Pakistan since May 27; the Pentagon is reviewing the requests. The US reimbursed Pakistan $1.3 billion between January and May for Pakistani operations conducted in 2008 and 2009, but has not paid for operations in 2010.