Gen. Ashfaq Parvez Kayani gave his authorization after consultations with his top commanders, the Express Tribune reported. The decision is the latest expression of Pakistan's outrage over the Nov. 26 NATO airstrike in its Mohmand tribal region in which 24 of its soldiers died.
Although the circumstances leading to the airstrike are under NATO investigation, Pakistan has taken a number of steps in protest, further aggravating the already strained U.S.-Pakistan relations.
The Press Trust of India news agency, quoting official sources, said Kayani told commanders they had "full liberty of action to respond (by) employing all capabilities" available at their disposal.
He was quoted by the sources as saying that there should be "no ambiguity in the rules of engagement for everyone down the chain of command" if they faced an attack.
The decision would mean U.S.-led NATO forces will also be treated as a potential threat, retired Brig. Mehmood Shah, former secretary the Pakistan's tribal areas, told the Express Tribune.
"Until now the focus of security forces at the Afghan border was to take action against militants and stop cross border infiltration but now they will also be keeping an eye on future NATO," Shah said.
Kayani's instructions were contained in a letter circulated among the concerned military quarters, the Express Tribune said.
Other experts told the newspaper they see the latest move as an attempt by the military brass to pacify the growing anger among the lower army ranks over the NATO strike and use it as a pressure tactic.