The blockade came after the Pakistan Telecommunication Authority (PTA) directed Internet service providers to block access to social network site Facebook indefinitely on Wednesday because of an online competition to draw the Prophet Mohammad.
Any representation of the Prophet Mohammad is deemed un-Islamic and blasphemous by Muslims.
Wahaj-us-Siraj, the CEO of Nayatel, an Internet service provider, said the PTA issued an order late on Wednesday seeking an "immediate" block on YouTube, which is owned Internet giant Google
"It was a serious instruction as they wanted us to do it quickly and let them know after that," he told Reuters.
YouTube was also blocked in the Muslim country in 2007 for about a year for what Pakistan called un-Islamic videos.
A Foreign Office spokesman condemned the publication of caricatures of the Muslim prophet on Facebook and urged countries to "address the issue" which he said was an "extremely sensitive and emotional matter for Muslims."
"Such malicious and insulting attacks hurt the sentiments of Muslims around the world and can not be accepted under the garb of freedom of expression," the spokesman, Abdul Basit, told a weekly briefing.
The publications of cartoons of the prophet in Danish newspapers in 2005 sparked deadly protests in Muslim countries. About 50 people were killed during violent protests in Muslim countries in 2006 over the cartoons, five of them in Pakistan.
Al Qaeda claimed responsibility for a suicide attack on the Danish Embassy in Islamabad in 2008, killing six people, saying it was in revenge for publication of the caricatures.
BLACKBERRY SERVICES
PTA spokesman Khurram Ali Mehran said the action to block YouTube was taken after the authority determined that content considered blasphemous by devout Muslims was being posted on the website.
"Before shutting down (YouTube), we did try just to block particular URLs or links, and access to 450 links on the Internet were stopped, but the blasphemous content kept appearing so we ordered a total shut down," he said.
The PTA issued a statement on Thursday saying, it would "welcome the concerned authorities of Facebook and YouTube to contact the PTA for resolving the issue at the earliest which ensures religious harmony and respect."
Some other websites, including Wikipedia and Flickr, have been inaccessible in Pakistan since Wednesday night. But the authority's spokesman said those sites had been blocked for technical reasons and no orders had been issued against them.
Siraj of Nayatel said the blocking of the two sites would cut up to a quarter of total Internet traffic in Pakistan.
After the PTA's directives against Facebook and YouTube, Pakistani mobile companies blocked all Blackberry services on Wednesday night but restored services used by non-corporate users later on Thursday.
The Obama administration has been critical of moves by other countries, including China, to impose Internet restrictions but U.S. State Department spokesman P.J. Crowley was cautious over Pakistan's latest moves, saying it was a "challenging issue."
"We are deeply concerned about any deliberate attempt to offend Muslims or members of any other religious groups. We do not condone offensive speech that can incite violence or hatred," Crowley told reporters in Washington.
However, Crowley added that Pakistan must ensure that in its actions, it did not restrict freedom of speech to the millions in that country who were connected to the Internet.
"Pakistan, as it works through these issues, has to try to find that difficult balance," said Crowley, adding that the issue was now a legal matter between Facebook and Pakistan's authorities.