Tegucigalpa, 1 Sept 2009
The US has halted all non-humanitarian aid to Honduras in the wake of the coup there in June.
The department of state said it needed to take strong action given the failure of the replacement regime "to restore democratic, constitutional rule".
Meanwhile, Brazil has suspended visa-free travel for all Hondurans in response to the coup.
Left-wing President Manuel Zelaya was ousted from power and forced to leave the country on 28 June.
A government has been installed under interim leader Roberto Micheletti, who has refused to allow Mr Zelaya back.
The US decision means that Honduras will lose access to more than $200m (£120m) in aid, the state department has previsously indicated.
The decision came as US Secretary of State Hillary Clinton held talks with Mr Zelaya.
"The Secretary of State has made the decision, consistent with US legislation, recognising the need for strong measures in light of the continued resistance to the adoption of the San Jose Accord by the de facto regime and continuing failure to restore democratic, constitutional rule to Honduras," a state department spokesman said.
The San Jose Accord is a plan brokered by Costa Rican President Oscar Arias, which - if agreed - would return Mr Zelaya to a limited form of power until elections scheduled for November.
Mr Micheletti's decision to reject the accord has triggering the US to respond by blocking aid to the country.
The suspension of American aid to Honduras does not mean the US believes that Mr Zelaya's removal officially meets the legal definition of a military coup d'etat, however, officials said.
"The Department of State recognises the complicated nature of the actions which led to June 28 coup d'etat in which Honduras' democratically elected leader, President Zelaya, was removed from office," the State Department said in a statement.
But officials made it clear that if the current situation continues, the US would not be able to view the November election as legitimate.
Brazil's move to suspend visa-free travel for Hondurans was also prompted by the coup.
By blocking new visas for Hondurans, Brazil hopes "to promote the immediate restoration of President Jose Manuel Zelaya to the functions to which the Honduran people elected him," the country's foreign ministry said in a statement.