US Secretary of State Hillary Clinton has accused Pakistan of abdicating to the Taleban by allowing them to control parts of the country.
Mrs Clinton said the situation in Pakistan posed a "mortal threat" to the security of the US and the world.
She said extremists were being allowed to control territory such as the Swat Valley, in north-western Pakistan.
She also called Pakistan's judicial system corrupt, adding that it has only limited power in the countryside.
Earlier this month, Pakistani President Ali Zardari signed a law implementing Islamic law - or Sharia - in the Swat Valley region as part of a deal to end a two-year Taleban insurgency there.
Once one of Pakistan's most popular holiday destinations, the Swat Valley is now mostly under Taleban control.
Thousands of people have fled and hundreds of schools have been destroyed as a result of a Taleban-led insurgency.
The Swat Valley is only about 100km (62 miles) from Islamabad, and reports suggest the Taleban are trying to expand the area under their control.
'Existential threat'
Giving evidence in Washington to the House Foreign Affairs Committee, Mrs Clinton said the situation in Pakistan "poses a mortal threat to the security and safety of our country and the world".
"I think the Pakistani government is basically abdicating to the Taleban and the extremists," she said.
She called on the Pakistani people to speak out "forcefully" against their government's policy, in what the BBC's Richard Lister in Washington called an unusual move.
The government's policy was conceding "more and more territory to the insurgents , to the Taleban, to al-Qaeda, to the allies that are in this terrorist syndicate", Mrs Clinton said.
US President Barack Obama has put new emphasis on trying to resolve the security problems in Pakistan, our correspondent says, offering billions of dollars in aid but demanding greater co-operation from the government.
Using stark language, Mrs Clinton said the situation in Pakistan needed urgent attention.
"I think that we can not underscore the seriousness of the existential threat posed to the state of Pakistan," she said, describing the rebels as a "loosely-confederated group of terrorists and others seeking to overthrow the Pakistani state".
The presidents of both Pakistan and neighbouring Afghanistan - where international forces are battling the Taleban - are due to come to Washington for talks next month.
During her hearing Mrs Clinton also answered questions on Cuba and Iran, warning that Tehran faces "very tough sanctions" if it rejects offers of engagement over its nuclear programme.
The US was "laying the groundwork" for such measures if Iran refused dialogue or the process failed, said Mrs Clinton. (BBC)
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