The European Commission will propose forcing U.S. diplomats to apply for visas to travel to the European Union from Jan. 1, 2009 unless Washington moves towards granting citizens of all EU states visa-free entry.
"No tangible progress has been made regarding the United States despite all efforts of the Commission and individual member states," the EU executive said on Wednesday.
"Citizens of 12 EU member states continue to require a visa when travelling to the United States," a statement said.
"Therefore, the Commission will propose retaliatory measures e.g. temporary restoration of the visa requirement for U.S. nationals holding diplomatic and service/official passports as from January 1, 2009 if no progress is achieved."
Most older EU states belong to the U.S. visa waiver programme, which allows their citizens to travel without visas.
But this does not apply to 11 of the 12 mostly ex-communist countries that joined the 27-member bloc in 2004 and 2007, or older member Greece.
Visas are a sensitive issue in EU-U.S. relations.
Washington's refusal to extend its visa waiver systematically to all EU newcomers causes resentment in countries that are among the most loyal U.S. allies -- some with troops fighting under American command in Iraq and Afghanistan.
A decision by the Bush administration earlier this year to sign separate visa deals with several ex-communist central European countries -- instead of with the EU as a whole -- sparked tensions within the bloc and across the Atlantic.
The United States has said it plans to allow some new EU states in its visa free programme this year. The EU executive says its Jan. 1 threat is meant to put pressure on the United States to deliver on this announcement.
"It is unacceptable that nationals from some third countries can benefit from visa free travel to the EU whilst some of our fellow EU citizens can't travel visa-free to those countries," EU Justice and Security Commissioner Jacques Barrot said in the statement.
Washington says it can only allow countries in its visa-free programme according to specific security and migration requirements.