Home Minister Rajnath Singh recently visited Pakistan for SAARC summit.
The US has called for closer cooperation between India and Pakistan in the fight against terrorism, amid fresh tension between the two South Asian neighbours over "glorifying" terrorism"
The remarks by the US State Department came as Home Minister Rajnath Singh asked Islamabad not to "glorify or patronise" terrorists, in response to Pakistan describing Hizbul commander Burhan Wani as a "martyr".
"We encourage regional dialogue regarding counterterrorism efforts. We advocate for closer cooperation between India and Pakistan to deal with terrorist threats in both the countries," US State Department spokesperson Mark Toner said during a daily briefing on Thursday.
He said, "terrorism is obviously a reality in both countries, and they need to - in order to effectively confront it, they need to work together. And that's something we've long encouraged."
Toner made the remarks while responding to a question about a two-day home ministers meeting of the South Asian Association for Regional Cooperation (SAARC) that ended in Islamabad on Thursday.
The meeting initially deemed a gesture towards reconciliation between the two countries, resulted in tension as Home Minister Rajnath Singh and his Pakistani counterpart Nisar Ali Khan clashed over the ongoing unrest in Kashmir since July 9.
The deputy spokesperson added that the SAARC forum allowed Pakistan and India to hold a "candid" discussion on the "areas of disagreement and concern" between the two neighbours.
Rajnath Singh, in his address at the SAARC meeting, said that there is "no good or bad terrorism" and urged that "terrorists should not be glorified or patronised".
Pakistan hosted the SAARC meeting amid unrest in Jammu and Kashmir that has left more than 50 people dead.
He criticised the Pakistan government for describing Burhan Wani as a "martyr". Wani's killing triggered the Kashmir unrest - blamed on Pakistan by India.
No bilateral meeting between Rajnath Singh and his Pakistani counterpart took place in Islamabad.
Rajnath Singh's visit to Islamabad was the first by an Indian minister to Pakistan after the January 2 attack on an Air Force base at Pathankot.