Indian authorities continued to blame Pakistan for cross-border attacks in Jammu and Kashmir, it said.
Washington: The US today listed Pakistan among the nations and regions providing "safe havens" to terrorists, saying terror groups like the LeT and JeM continue to operate, train, organise and fundraise inside the country in 2016.
In its annual 'Country Report on Terrorism', as mandated by the Congress, the State Department said that Pakistani military and security forces undertook operations against groups that conducted attacks within Pakistan such as Tehrik-e Taliban Pakistan.
"Pakistan did not take substantial action against the Afghan Taliban or Haqqani, or substantially limit their ability to threaten US interests in Afghanistan, although Pakistan supported efforts to bring both groups into an Afghan-led peace process," the State Department said.
"Pakistan did not take sufficient action against other externally focused groups, such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammad (JeM) in 2016, which continued to operate, train, organise, and fundraise in Pakistan," the report said.
India, it said continued to experience attacks, "including by Maoist insurgents and Pakistan-based terrorists". Indian authorities continued to blame Pakistan for cross-border attacks in Jammu and Kashmir, it said.
"In January, India experienced a terrorist attack against an Indian military facility in Pathankot, Punjab, which was blamed by authorities on JeM. Over the course of 2016, the Government of India sought to deepen counter terrorism cooperation and information sharing with the United States," the State Department said.
The Indian government continued to closely monitor the domestic threat from transnational terrorist groups like ISIS and Al-Qaeda in the Indian Subcontinent (AQIS), which made threats against India in their terrorist propaganda. A number of individuals were arrested for ISIS-affiliated recruitment and attack plotting within India, the report said.
In a separate chapter, the State Department listed Pakistan as one of the safe havens of terrorism.
The State Department said that numerous terrorist groups, including the Haqqani Network (HQN), the LeT and JeM continued to operate from Pakistani soil in 2016.
"Although LeT is banned in Pakistan, LeT's wings Jamaat-ud-Dawa (JuD) and Falah-i-Insaniat Foundation (FiF) were able to openly engage in fundraising, including in the capital," it said.
"LeT's chief Hafiz Saeed (a UN-designated terrorist) continued to address large rallies, although in February 2017, Pakistan proscribed him under relevant provisions of Schedule Four of the Anti-Terrorism Act, thus severely restricting his freedom of movement," it noted.
The 2015 ban on media coverage of Saeed, JuD, and FiF continued and was generally followed by broadcast and print media, it said.
According to the State Department, the Pakistani government did not publicly reverse its December 2015 declaration that neither JuD nor FiF is banned in Pakistan, despite their listing under UN sanctions regimes, although in January 2017, Pakistan placed both organisations "under observation" pursuant to Schedule Two of the Anti-Terrorism Act.
While not a ban, keeping the outfits under observation allows the government to closely scrutinise the activities of both organisations.
On November 11, Pakistan's National Counterterrorism Authority published its own list of banned organisations that placed JuD in a separate section for groups that are "under observation" but not banned.
Pakistan continued military operations to eradicate terrorist safe havens in the Federally Administered Tribal Areas, although their impact on all terrorist groups was uneven, it said.
In its report to the Congress, the State Department said in 2016, India and the United States pledged to strengthen cooperation against terrorist threats from groups including al-Qaeda, the ISIS, JeM, LeT and D-Company (Dawood Ibrahim's group), including through greater collaboration on designations at the UN.
Indian and US leaders directed officials to identify new areas of collaboration through the July US-India Counterterrorism Joint Working Group, applauded finalisation of a bilateral arrangement to facilitate the sharing of terrorism screening information, and called upon Pakistan to bring the perpetrators of terrorist attacks against India to justice, the report said.