The US has ceased conducting ground raids into Pakistan following furious reactions from its ally and is instead relying on intensified air strikes which according to some in the government is not sufficient to reign in militants in the restive areas.
Citing American and Pakistani officials, the New York Times said attacks by remotely piloted Predator aircraft have increased sharply in frequency and scope in the past three months.
There have been at least 18 Predator strikes since the beginning of August, some deep inside Pakistan's tribal areas.
However, officials were quoted as saying that by relying on air strikes alone, the United States would not be able to weaken Al Qaeda's grip in the tribal areas permanently.
Within the government, advocates of the ground raids have argued if the US can successfully capture suspected Qaeda leaders by just sending Special Operations forces into Pakistan, the paper said.
The decision to focus on an intensified Predator campaign using Hellfire missiles appears to reflect dwindling options on the part of the White House for striking Al Qaeda in the Bush administration's waning days, it added.
After months of debate within the administration and mounting frustration over Pakistan's failure to carry out more aggressive counter terrorism operations, President Bush finally gave his approval in July for ground missions inside Pakistan.
But the only American ground mission known to have taken place was a Special Operations raid on September three, in which the roughly two dozen people killed including some civilians, it said, adding that American officials say there has not been another commando operation since.
American officials, the report said, acknowledge that following the September three raid they were surprised by the intensity of the Pakistani response, which included an unannounced visit of country's national security adviser, Mahmud Ali Durrani to Washington.
He registered his protest in person with top White House officials, including Stephen J Hadley, Bush's national security adviser.
A senior administration official said that no tacit agreement had been reached to allow increased Predator strikes in exchange for a backing off from additional American ground raids, an option the officials said remained on the table.
But Pakistani officials have made clear in public statements that they regard the Predator attacks as a less objectionable violation of Pakistani sovereignty, it added.
"There's always a balance between respecting full Pakistani sovereignty, even in places where they're not capable of exercising that sovereignty, and the need for our force protection," the administration official told the paper.
As part of the intensified attacks in recent months, the CIA has expanded its list of targets inside Pakistan and has gained approval from the government in Islamabad to bolster eavesdropping operations in the border region, according to a US officials.
Once largely reserved for missions to kill senior Al Qaeda operatives, the Predator is increasingly being used to strike Pakistani militants and even trucks carrying rockets to resupply fighters in Afghanistan, it added.
Senior military and counter terrorism officials were quoted as saying that the increased air strikes have disrupted planning, pushed some insurgents deeper into Pakistani territory, prompted some militant commanders to post more sentries, and forced the militants to use their cell phones and satellite phones, which American eavesdropping operations can monitor.