Such a move could seriously damage the U.S war effort in Afghanistan, limit a program targeting al-Qaida insurgents along the Pakistan frontier, and restrict Washington's access to information in the nuclear-armed country.

According to a statement drafted by the ISI, supported by interviews with officials, an already-fragile relationship between the two agencies collapsed following the shooting death of two Pakistanis by Raymond Davis, a U.S.contracted spy who is in jail in Pakistan facing possible multiple murder charges.