Pakistan criticized the United States for blacklisting the Kashmiri separatist group Hizbul Mujahideen as a terrorist organization, calling the move "unjustified".
The State Department designation bans U.S. citizens and residents from dealing with the group and any assets found to belong to it in areas under US jurisdiction will be frozen.
"We are disappointed with the US decision in view of the fact that Kashmir is an internationally recognized dispute with UN Security Council resolutions pending implementation for the last 70 years," Nafees Zakariya, Pakistan's foreign ministry spokesman, told reporters in the capital Islamabad. The move was "completely unjustified", he said.
After Washington announced the decision on Wednesday, several hundred activists gathered in Muzaffarabad, capital of Pakistan-administered Kashmir, and chanted anti-U.S. slogans.
Both India and Pakistan claim Kashmir as a whole. Pakistan has denied giving material help to Kashmiri separatists but has pledged to provide continued diplomatic and moral support. India blames Pakistan for stoking the 28-year-old revolt in Muslim-majority Kashmir and has stepped up its pressure on Pakistan over the conflict.