Belarus, accused in the West of violating human rights, recalled its ambassador to the US yesterday and urged the US envoy to leave the former Soviet republic.
Washington, where officials have described Belarus as Europe's last dictatorship, said its ambassador would remain in Minsk, describing the Belarussian move as unjustified and saying it would further isolate the country.
Belarussian President Alexander Lukashenko has taken steps in recent months to improve ties with the West. But the Foreign Ministry said the latest moves were prompted by US sanctions imposed on Belarus's national oil products firm Belneftekhim.
"One of these steps is the recall of Belarus's ambassador in Washington for consultations," spokesman Andrei Popov said. "At the same time and for the same purpose, Belarus urges the US ambassador to leave our country."
Mr Popov later said Belarus remained committed to better ties. "This does not mean that we are halting dialogue with the West," he said.
In Washington, White House National Security Council spokesman Gordon Johndroe expressed regret at "this unjustified action by the Belarussian government.
"This is deeply disappointing and only takes them further away from Europe and the rest of the world."
The US State Department initially said that if Belarus wanted Ambassador Karen Stewart to leave, she would go but later reversed itself, saying she would stay.
"She'll remain in Minsk while we continue to review the situation," US State Department spokesman Tom Casey. "It's important, we think, to have... high-level diplomatic representation there to engage with the Belarussian government on a number of concerns."
The State Department said its initial reading of media reports was that Belarus had formally asked Ms Stewart to leave but later understood it was simply a suggestion.
"If all they are doing is strongly suggesting... (she) leave, we duly note the suggestion and choose not to comply with it," said a US official who asked not to be named because of the sensitivity of the diplomacy.
Mr Lukashenko has sought improved relations with the West, particularly the EU, after quarrelling with Russia last year over energy prices.
He had threatened to expel Ms Stewart, an outspoken critic of his policies, late last year if new sanctions were imposed against his country, wedged between Russia and three EU states.
Both the US and EU have barred Mr Lukashenko on grounds that he rigged his 2006 re-election.
Washington last year imposed sanctions against Belneftekhim, prohibiting Americans from doing business with the refiner and freezing any assets it has under US jurisdiction.
A source close to Belarus's government said the new action followed a US note on those sanctions which "allowed for a broad interpretation of a list of firms linked to Belneftekhim. The Belarussian side viewed that as additional sanctions."
As part of moves to improve relations, particularly with the EU, courts have in recent months freed several opposition activists considered by the West to be political prisoners.
But the country's most prominent detainee, Alexander Kozulin, is still serving a five-and-a-half-year term for helping organise protests against the President's re-election two years ago.
Mr Casey said he believed Belarus's action was in response to "the reissuance of basically our existing sanctions." He also expressed regret that Mr Kozulin had yet to be released.
As Belarus announced its action, officials in Brussels signed a memorandum of understanding providing for the presence of a permanent EU delegation in Minsk. EU countries have voiced hope that a September parliamentary election could improve ties.
A leading member of the opposition said the new measure was an attempt to play the US against the EU.
"The authorities are trying to resort to 'divide and conquer'," said Alexander Lebedko of the United Civic party. "They are portraying a constructive Europe with which dialogue is possible and demonising the United States."