Military spokesman Major-General Shaukat Sultan said a few hundred people might have been buried in the collapse of the mountainside near the town of Hattian Bala and there was no chance they could have survived. He said two streams had been blocked flowing out of Jhelum River near the town, which has a population of up to 12,000 people, creating lakes 80 feet (24 metres) and 50 feet (15 metres) deep.
The town is about 45 km (30 miles) southeast of Muzaffarabad, capital of Pakistani Kashmir.
Sultan said huge crevices and cracks had appeared in the mountain that were widening by the day and further landslides could breach the sides of the lakes.
"If God forbid, these lakes, because of the pressure ... get breached, they could probably affect the town of Hattian," he told a news conference.
"So far the population is not in danger," he said. "The population may never be in danger, but chances of any kind of disaster cannot be ruled out.
"Maybe after a few months, maybe after summer there are heavy rains, heavy snowfall, too much water may come in, after that yes, it could be (dangerous)."
Sultan said geologists, seismologists and other experts were assessing the situation but there were currently no plans to evacuate the area.
"We are alive to the problem and we are carrying out studies and what is humanly possible, we will take all those actions," he said.
"At this moment, the government does have a lot of time available. We are immediately into some kind of disaster management so that another disaster out of these lakes does not occur."
More than 73,000 people were killed and up to 3 million made homeless by the 7.8 magnitude quake. Another 1,300 people were killed on the Indian side of the disputed Kashmir region.
Harsh winter weather has set in, raising fears for the health of hundreds of thousands of survivors living in tents or other rudimentary shelters.