ISLAMABAD, Pakistan May 23, 2011 -- The relationship between the U.S. and Pakistan -- already fragile following America's mission to kill Osama bin Laden and further strained by the release of a new cache of leaked U.S. diplomatic cables -- has been pushed to such an unprecedented low that, as one senior U.S. official put it, "we are communicating by fax."

In the same week U.S. envoy to Afghanistan and Pakistan Marc Grossman and CIA Deputy Director Michael Morrell traveled to Pakistan to revive the near-frozen relationship, a local Pakistani news outlet, Dawn, began publishing last week more than 4,000 never-before-seen U.S. diplomatic cables it obtained from the anti-secrecy website WikiLeaks concerning America's operations in the region, prompting strong rebuttals from the military establishment there.

In one of dispatches published over the weekend, U.S. officials say that U.S. special forces were deployed in Pakistan's tribal areas alongside the Pakistan military and carried out joint operations in September 2009.

Shortly after the report was published, a Pakistan Army spokesman responded, saying the army "categorically denies the presence of U.S. troops in North and South Waziristan agencies as reported by WikiLeaks. No U.S. troops are involved in any military operations in FATA [the Federally Administered Tribal Areas]."

Published a day before, another cable revealed that Pakistan's top Army chief Gen. Ashfaq Kiyani asked the U.S. for "continuous Predator [drone] coverage" during Pakistani military operations in South Waziristan, Pakistan. Again the Pakistan Army was swift to issue a statement contradicting the leak.

READ: WikiLeaks Cables Say Pakistan Asked for More, Not Fewer Drones

Sunday, Dawn published a note from Bryan Hunt of the U.S. consulate in Lahore, Pakistan, which shone light on a past issue known to Pakistani authorities, but which routinely goes unpublicized: wealth flowing to extremists in Pakistan from Saudi Arabia and the United Arab Emirates.

In the 2008 cable, Hunt writes that "financial support estimated at nearly $100 million USD annually was making its way" to radical Islamic schools that back militancy, "ostensibly with the direct support of those [Saudi Arabia and UAE] governments."

Such support to militants dates back to when Islamists were battling the Soviet invasion in the 1980s and has continued relatively unchecked for almost two decades since.

In the same cable, Hunt writes, "Local economic conditions coupled with foreign financing appear to be transforming a traditionally moderate area of the country into a fertile recruiting ground for terrorist organizations."

"This growing recruitment network poses a direct threat to [U.S.] counter-terrorism and counter-extremism efforts in Pakistan," he says.

The breakdown in relations between the U.S. and Pakistan comes at a particularly difficult time for the two countries as the U.S. is spearheading a desperate race to track down al Qaeda and Taliban leaders both in and out of Pakistan based on leads discovered in bin Laden's compound. Despite public condemnation of the U.S. May 2 operation by Pakistani officials, since the raid the U.S. has conducted several drone strikes against militants in the country.

At the same time, Pakistan today suffered what officials called the most serious assault on a military installation when a group of militants stormed a Navy base and held it for about 15 hours before Pakistani authorities regained control.