Colin Powell and George Bush: United against terror
President Bush named the Pakistan-based Ummah Tameer-e-Nau (UTN) and the Kashmir-based Lashkar-e-Toiba (LET).
The LET is one of two organisations that the Indian Government blames for a deadly attack against the Indian parliament last week that left a dozen people dead.
Mr Bush accused the LET of being a "stateless sponsor of terrorism" and of trying to disrupt relations between India and Pakistan.
But a spokesman for the LET told the BBC the US action would have no impact, as it had no assets in Europe or America.
"We are neither a terrorist organisation, nor does Islam allow acts of terror," the spokesman, Yahya Mujahid, said in another comment to the AFP news agency.
"We are waging a war against Indian occupation of Kashmir and we are against targeting civilians in the Kashmiri freedom struggle."
Pakistan has been an ally of the US in its campaign against the Taleban in Afghanistan, while trying to reign in Islamic militants who supported the Taleban.
The other group, UTN, operates a charity but Mr Bush accused it of aiding al-Qaeda in helping acquire information on nuclear weapons.
The charity was established by a former commissioner of the Pakistan Atomic Energy Commission.
Gains touted
Mr Bush, flanked by Secretary of State Colin Powell and Treasury Secretary Paul O'Neill, also outlined other gains made in US efforts to disrupt terrorist activities.
Since military operations began on 7 October, Mr Bush said that US and British forces had destroyed at least 11 terrorist training camps and 39 command and control sites of Afghanistan's Taleban, which the US says is guilty of harbouring terrorist organisations like al-Qaeda.
In its efforts to disrupt funding for alleged terrorist organisations, the president said the US had frozen $33m in assets of groups involved in funnelling money to suspected terrorist organisations.
And the president said that 142 countries involved in the financial campaign against terrorism had frozen an additional $33m in assets.
The report also worked to highlight humanitarian efforts saying that the US Department of Defence had dropped some 2.5 million food packets over Afghanistan and that the US had provided $187 m of aid to Afghanistan since October.