US retaliation would be contemplated only under extreme circumstances, unnamed senior military officials said.
These circumstances might include a catastrophic attack that convinced President Barack Obama that the ongoing campaign of CIA drone strikes was insufficient.
"Planning has been reinvigorated in the wake of Times Square," one official told the newspaper.
The report comes in the wake of the failed May 1 attack on New York's crowded Times Square, which is in the city's busy theatre district.
Faisal Shahzad, a 30-year-old Pakistani-born naturalised US citizen, was arrested apparently trying to flee the country on a flight to Dubai 53 hours after street vendors alerted police to smoke coming out of a vehicle there.
The van was found to contain a bomb consisting of timers, wires, fireworks, gasoline, propane tanks and fertilizer.
Shahzad is due for a federal court hearing in New York on June 1.
US officials say Shahzad is connected to Pakistani Taliban insurgents and Obama has sent two senior national security aides to Islamabad to join the investigation into the May 1 car bombing attempt.
According to The Post, the US administration is trying to deepen ties to Pakistan's intelligence officials in a bid to head off any attack by militant groups.
The two countries recently established a joint military intelligence center on the outskirts of the northwestern city of Peshawar, and were in talks to set up another one near Quetta, the paper said.
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