"There's no place to go any longer," Clinton said, referring to Pakistan's leadership. "The terrorists are on both sides" of the border between Afghanistan and Pakistan. "They are killing both peoples," she said.
"No one should be in any way mistaken about allowing this to continue without paying a very big price," the Secretary of State was quoted as saying by The New York Times.
Clinton, who is in Afghanistan, will go to Pakistan on Thursday with a powerful American delegation that will include the new chairman of the Joint Chiefs of Staff, General Martin Dempsey and new director of the Central Intelligence Agency, David Petraeus, who stepped down as the senior military commander in Afghanistan this year.
Appearing with Afghanistan President Hamid Karzai, Clinton said Pakistan could "either be helping or hindering" efforts to find both a military and a political resolution to the war in the country.
It is now "a time for clarity." "We will be delivering a very clear message to the government of Pakistan and to the people of Pakistan because they too have suffered," she said.
"They have suffered at the hand of the same kind of terrorists. So there should be no support and no safe haven anywhere for people who kill innocent men, women and children."
The Times report said Clinton's remarks underscored the fact that the war in Afghanistan -- along with the hopes for a smooth American withdrawal by 2014 -- has become fully intertwined with Pakistan's own insurgents, some of whom have the support of the country's security services.
Relations between the US and Pakistan have been going downhill following a series of events that have lead to a continuous war of words between the two countries.
The deterioration in ties began with the arrest of Central Investigation Agency officer Raymond Davis, the secret raid that killed Osama bin Laden in Pakistan in May, attack on the American Embassy in Kabul last month and Admiral Mike Mullen blaming elements within Pakistan's top spy agency, Inter-Services Intelligence of supporting the terror group Haqqani network.