Secretary of State Hillary Rodham Clinton terminated more than $30 million in aid to Honduras on Thursday in an effort to increase pressure on the country's de facto government to restore democratic rule after a coup in June.
The State Department, which had earlier suspended the aid, said it could cut off as much as $200 million more unless ousted President Manuel Zelaya and his democratically elected government were reinstated.
State Department officials said they also might not recognize the presidential election that the interim government has scheduled for November.
The Obama administration has moved cautiously to cut off assistance to Honduras, a tiny and impoverished country that is heavily dependent on U.S. aid and trade. But Washington faces growing pressure to do more to dislodge the government led by Roberto Micheletti, the congressional leader chosen to replace Zelaya hours after the army ousted the president.
Zelaya, in a speech at George Washington University, said Wednesday that President Obama was "risking his prestige in Latin America" by failing to do more to pressure the interim government.
Philip J. Crowley, the chief State Department spokesman, said that Clinton, in moving to cut off aid, was "recognizing the need for strong measures in light of the continued resistance" to a peace deal proposed by Costa Rican President Oscar Arias, who has sought to mediate the crisis. The deal would have restored Zelaya to office before the November election while compelling him to drop efforts to change the law so he could run again.
The State Department said it was also revoking the visas of several officials and supporters of the interim government.
Some Latin American countries are eager to see greater pressure exerted on the interim government. At the same time, the Obama administration faces growing opposition from some congressional Republicans and lobbyists who contend that Zelaya, an ally of leftist leaders in Latin America, was seeking to undermine the Honduran Constitution so that he could extend his tenure.
"The Honduran people seek freedom, security and prosperity for their country," said Rep. Connie Mack (R-Fla.). "They deserve our support, not punishing sanctions and severe reductions in aid."
Crowley said that the State Department "recognizes the complicated nature of the actions, which led to the June 28 coup d'etat."
"This is not about what the United States must do," Crowley said. "This is about what [the interim leaders] must do if they're going to get out of the hole that they have put themselves in."