In a weekend report, The New York Times, quoting senior U.S. administration and congressional officials, said Pakistan had illegally modified the missiles, making them capable of striking land targets which could threaten India.

The missiles reportedly were sold to Pakistan in the 1980s during U.S. President Ronald Reagan's administration for defensive use. Any modification of these missiles thus would be a violation of the U.S. Arms Control Export Act.

The Times said the accusation, which may exacerbate existing tensions between the United States and Pakistan, was actually contained in a June diplomatic protest given to Pakistani Prime Minister Yusaf Raza Gilani and his officials.

In the past, Pakistan has also been accused of modifying U.S.-made P-3C aircraft for land-attack missions.

The report on the missiles, which Pakistan denied and said were developed domestically, could not have come at a more inopportune time for Islamabad, which is already under U.S. pressure to engage its military in fighting the growing Taliban menace within its borders rather than worrying about India and competing with it for weapons systems.

There is also the $7.5 billion, five-year U.S. aid package proposed by U.S. President Barack Obama's administration, which awaits congressional approval.

Although the missiles in Pakistani hands were conventional ones based on the anti-ship Harpoon, the issue raises concern about Pakistan's development of new conventional and nuclear weapons, the Times reported quoting the officials.

"There's a concerted effort to get these guys to slow down," one official told the Times. "Their energies are misdirected."

The issue arose after U.S. intelligence last April detected a suspicious test of a missile, apparently a new offensive weapon, which was never announced by Pakistan.

Hussain Haqqani, Pakistan's ambassador to the United States, told the state-run Associated Press of Pakistan, "We will make sure that the U.S. understands the correct picture and we will fight back periodic efforts to falsely blame Pakistan, which remains a critical U.S. ally in fighting terrorism."

CNN reported any modified missile would allow the Pakistani navy to hit targets in India from sea, making the current situation in the subcontinent tenser.

The two nuclear weapons neighbors have fought three wars since 1947. Their relations have become tense since the Mumbai terror mayhem last November in which more than 160 died. India says it has enough evidence to prove the attack was planned by the militant Lashkar-e-Toiba in Pakistan.

Islamabad says it is doing all it can to bring the terrorists to justice. It also wants the stalled peace talks between the two countries to resume.

It is in this environment that the report on the missile modification has appeared.

The Times said the missiles, regardless of their origin, would be a significant new entry into Pakistan's arsenal against India that could set off another round of arms race between them.

"The focus of our concern is that this is a potential unauthorized modification of a maritime anti-ship defensive capability to an offensive land-attack missile," a U.S. senior administration official told the Times.

A senior Pakistani official told the Times Pakistan developed the tested missile just as it had modified North Korean designs to build a range of land-based missiles. He also said Pakistan even agreed to let U.S. officials inspect its Harpoon inventory for any violation.

In India, the Times report was seen as vindicating its longstanding complaint that U.S. military aid to Pakistan is invariably directed against it.

"Pakistan has in fact a history of acquiring missiles in particular from countries like North Korea and China and then modifying them and claiming these were developed by Pakistan and therefore they were indigenous technology," defense expert Maroof Raza told the Times-Now TV.

"The central question is if the Americans are aware and I am quite convinced they are aware, how the Pakistani military continues to use American funding."

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