A US airstrike killed 11 Pakistani troops on the border with Afghanistan straining relations between the two supposed partners in the war on terror.
The attack followed a clash between Taliban militants and Afghan and coalition forces in the same area.
The Pakistan army said the incident in the Mohmand tribal region "had hit at the very basis of cooperation" between the two countries.
The army lodged a strong protest and reserved "the right to protect our citizens and soldiers against aggression," it said. Pakistan's government also made a diplomatic protest.
A Pentagon official admitted an airstrike had been ordered during an incursion by insurgents into Afghanistan from Pakistan.
It was launched under rules that allow coalition forces to continue over the border with Pakistan if they are in hot pursuit of a target.
In a statement issued from Afghanistan, the coalition said it had retaliated after its forces came under fire about 200 yards inside Afghanistan's eastern Kunar province during an operation that had been "previously co-ordinated" with Pakistan.
The coalition fired artillery, and then using drones to locate more "anti-Afghan forces," launched airstrikes "until the threat was eliminated."
The coalition said that it had informed the Pakistan army that it was being attacked from a wooded area near the Pakistani checkpoint at Gorparai - where the Pakistani's Frontier Corps were killed. It said coalition forces did not enter Pakistan.
A Pakistan army spokesman denied the insurgents attacked from Pakistan or that there had been any attack launched from the Gorporai post. He also denied the coalition had given prior notice of its operation in the area.
He said Afghan army forces were attacked inside Afghanistan as they were withdrawing at Pakistan's request after setting up a military post in a disputed border region.
"They were on their way back and they were attacked by insurgents in their own territory," he said, adding that Afghans had called in coalition airstrikes.
The lawless and remote mountain region is believed to be used by pro-Taliban militants as a launch pad for attacks into Afghanistan.
Afghanistan often accuses Pakistan of aiding the Taliban, whose hard-line regime it supported until its was overthrown in 2001 for harbouring al Qaida.
The army said the airstrike was a "completely unprovoked and cowardly act."
State-run Pakistan Television said eight civilians were killed as well as the troops .
Two helicopters brought the bodies of the 11 troops and another 13 wounded soldiers to Peshawar, the main city in north-western Pakistan, where top provincials attended their funeral ceremony.
North West Frontier Province governor. Owais Ahmed Ghana told reporters the airstrike "can compel us to review our policy (in the war on terror)."
In Islamabad, Prime Minister Yousuf Raza Gland said Pakistan "vehemently condemned" the airstrike.
"We will take a stand for the sovereignty, dignity and self-respect of this country," he told Parliament.
Anti-US sentiment is already running high in Pakistan, where the newly elected civilian rulers, particularly in the north-western province, are seeking to broker peace with militants to curb an explosion in extremist violence.Reuse content