Pakistan accused NATO of killing 24 soldiers in what is being called the single deadliest air strike of the 10-year war in Afghanistan, and reportedly ordered a review of all co-operation with the US and NATO.
Islamabad also closed the main border for NATO supplies into Afghanistan and said gave the US 15 days to vacate a drone base in the country, The Times of India reported.
The attack by NATO helicopters and fighter jets on two Pakistan military outposts on Saturday looked set to inflame US-Pakistani tensions caused by the killing of Osama bin Laden in May.
NATO and U.S. officials expressed regret about the deaths of the Pakistani soldiers, Reuters reports.
However, Prime Minister Yousuf Raza Gilani called the attack a "grave infringement of Pakistan's sovereignty," the BBC reported.
Reaction on the ground in Pakistan was reportedly less restrained.
"U.S. stabs Pakistan in the back, again," read a headline in the Daily Times, which also called the attack was the worst single incident of its kind since Pakistan "uneasily allied itself with Washington in the days immediately following the September 11, 2001 attacks on US targets."
TV stations broadcast footage of coffins carrying the dead soldiers draped in green and white Pakistani flags in a ceremony at the headquarters of the regional command in Peshawar, Reuters reported.
About 500 members of Jamaat-e-Islami, Pakistan's most influential religious party, staged a protest in Mohmand tribal area, where the NATO attack took place.
"Down with America" and "Jihad is The Only Answer to America," they yelled.
Foreign minister Hina Rabbani Khar told her counterpart State Hillary Rodham Clinton on Sunday that the attack "was unacceptable, showed complete disregard for human life and sparked rage within Pakistan," according to the Times of India.
"This negates the progress made by the two countries on improving relations and forces Pakistan to revisit the terms of engagement," Reuters citing a Foreign Ministry statement as saying.
Pakistan is seen as critical to U.S. efforts to stabilize neighboring Afghanistan.
The commander of NATO-led forces in Afghanistan, General John R. Allen, reportedly said he had offered his condolences to the family of any Pakistani soldiers who "may have been killed or injured" during an "incident" on the border.