The case of US national Raymond Davis, who killed two Pakistanis in late January, has raised tensions between the two uneasy allies to a level not seen since the late 1990s.
Davis, the US embassy in Islamabad says, is a diplomat who acted in self-defence when he shot the two men in the middle of a busy Lahore street on Jan. 27.
He thus enjoys diplomatic immunity and should be released according to international law and custom.
Pakistan says it is a matter for the courts to decide and has moved to charge Davis with two counts of murder. On Friday, a Lahore court sent Davis to jail for 14 more days while the police continue their investigation, a deputy prosecutor said.
Here are some questions and answers about the possible diplomatic repercussions of the case.
What are Pakistan's issues with the United States?
For all the talk of Pakistan and the United States being strategic allies in the war on terrorism, the two countries are a prickly pair, with both sides suspicious of the other.
Pakistan regularly complains about the unacknowledged CIA drone program that has killed hundreds in Pakistan's mountainous tribal regions.
Pakistanis have also railed against the conviction of Pakistani neuroscientist Aafia Siddiqui for shooting at U.S. officials while in custody and resent a civil court case arising from the Mumbai attacks in 2008 that would put the head of its powerful spy agency in the dock of a Brooklyn courtroom.
That Americans connected with the embassy drive in Pakistan with fake plates because of security concerns is well known to the federal government, but it is a source of great suspicion among the public.
After Umar Farouk Abdulmutallab tried to blow up a Detroit-bound airplane on Dec. 25, 2009, Pakistan was placed on a list of countries requiring mandatory -- and aggressive -- screening procedures at airports, infuriating the country. When military personnel and provincial legislators were searched at American airports, the U.S. State Department had to intervene.
What are the United States issues?
Under immense pressure from Washington, former Pakistani President Pervez Musharraf made the highly unpopular decision to join the U.S. war on al Qaeda following the Sept. 11, 2001, attacks.
Despite Pakistan being one of the largest non-NATO recipients of American military aid -- it is expected to receive about $3 billion this year -- it has since evolved into a hub for some of the world's most lethal militant groups. Militants easily cross the long, porous border to attack U.S.-led NATO troops in Afghanistan or plot against Pakistan's government. Ambitious militants inspired by Osama bin Laden's calls for global holy war train there.
Beyond that, though, the Americans complain that Pakistan often drags its feet on processing diplomatic visas and imposes what the Americans say are unreasonable restrictions on the movements of its diplomats.
After a border incident last year involving NATO helicopters that left two Pakistanis dead, Pakistan closed down the main land crossing into Afghanistan to supplies for the war effort in Afghanistan for 10 days.
On a recent visit, U.S. Vice President Joe Biden implicitly criticised the Pakistani media for its rampant anti-Americanism, saying that "misconceptions" were common and hurt relations.
What are the domestic politics?
The Davis affair isn not just about international politics, however. It is exacerbated by the rivalry between the ruling Pakistan People's Party and the Pakistan Muslim Leage-Nawaz (PML-N) faction, which controls Punjab where the Jan. 27 incident took place.
The PML-N appears to be trying to use the case to push the the ruling party into a corner. If the Foreign Ministry declares Davis to have diplomatic immunity and calls for his release, the PPP will bear the brunt of popular fury at what Pakistanis see as yet another violation of their sovereignty.
But if it allows the Lahore High Court to move ahead with double murder charges, it will infuriate the United States and endanger billions of dollars in aid money now controlled by a Republican House of Representatives.
In either case, the PML-N will score points off the PPP with its supporters, and Prime Minister Yusuf Raza Gilani's government will suffer another blow.
What is likely to happen?
Most Pakistani experts believe Davis will be eventually released after the PML-N has inflicted enough damage to the PPP government.
"This whole case has acquired a public dimension and a lot of emotion," said Shamshad Ahmad Khan, a former ambassador to the United Nations and former foreign secretary. "The people have now made it a problem of sovereignty, humiliation and all sorts of issues."
As for when Davis would be released, it is hard to say. Khan believes the federal government will try to let the public anger cool and then quietly release him. But he had no idea when that would be.