Pasha, who faced tremendous criticism after the May 2 US raid that killed Al-Qaida leader Osama bin Laden in the garrison city of Abbottabad, made Pakistan`s stand clear during a meeting yesterday between visiting CIA Deputy Director Michael Morell and senior ISI officials.
The ISI chief took a firm stance with the US on drone strikes, The Express Tribune newspaper quoted its sources as saying.
"We will be forced to respond if you do not come up with a strategy that stops the drone strikes," Pasha reportedly told Morell.
Pasha also described a recent incursion by NATO helicopters into Pakistani airspace as a "shock" for defence cooperation between the US and Pakistan.
Morrell also met operational leaders of the ISI and members of the spy agency`s recently set-up counter-terrorism division.
Both sides reportedly discussed a way forward that will involve the US stopping drone strikes and expanding joint operations against militants.
Relations between the CIA and ISI were strained even before the May 2 unilateral American raid that killed bin Laden.
CIA contractor Raymond Davis shot and killed two armed Pakistani men in Lahore in January, taking relations between the spy agencies to a new low.
The ISI was embarrassed by the incident involving Davis, who was reported to be tracking groups like the Lashkar-e-Taiba, and has been pressing the US to reveal the extent of its network and activities inside Pakistan.
The ISI repeated the demand during yesterday`s meetings, with Pakistani officials asking the US to provide a list of names of people employed by the CIA or other US intelligence agencies, The Express Tribune reported.
In order to "induce US cooperation" the ISI threatened to "restrict access" for all US citizens in Pakistan, including asking US contractors to leave the country.
In recent weeks, reports have emerged of US military and intelligence personnel leaving Pakistan.
The ISI made it clear that none of those leaving will be allowed to return without the approval of Pakistani intelligence.
The government has decided to introduce a system of storing biometric information of US contractors visiting Pakistan to prevent unauthorised persons from entering the country, the report said.
However, the report said the suspicions between the CIA and ISI "run both ways".
CIA Deputy Director Morell asked about the wreckage of the US stealth helicopter that was destroyed during the raid against bin Laden.
The Pakistani government has agreed to return the wreckage to the US.
Morrell also asked about progress in determining who was involved in supporting and protecting bin Laden in Abbottabad, the report said.
ISI officials demanded access to information US forces obtained from bin Laden`s compound and photographs and videos the US has of the raid.
Despite the disagreements and mutual suspicion, progress was made in the negotiations and this was made possible by "cooler heads prevailing on both sides" as they realised that "preserving the CIA-ISI relationship was in the interest of both sides", the report said.
Pakistan and the US might sign a formal agreement on particulars of their cooperation in the war against terrorism.
Previous cooperation has relied on several informal, and sometimes unacknowledged, arrangements, the report said.