Ok, I can confirm that the Xbox live service is inaccessible on multiple ISPs in Pakistan (I've checked PTCL, WiTribe, Wateen and PERN). The service is running normally in other countries as close as UAE (my cousin has confirmed from Dubai).
PTA appears to have blocked a range of ports at PIE to counter some VPNs that had proved to be unblockable till now. That could have included ports needed for Xbox live.
That is the most likely reason Xbox can connect to the internet but not to Live service. When you test your Xbox connection, it first checks for connection to your modem (Network). Passing that, it checks for access to the internet in general (Internet). After passing that, it checks for its connection to Live which requires port 3074 among others. That is where it's getting stuck.
So what we can do is make enough noise to our respective ISPs and they will in turn sort this problem out with PTA. I see no reason that Xbox Live is being blocked by PTA on purpose so it should be restored soon. Because if IS being blocked on purpose, the folks at PTA have just lost it
p)