The US government is withholding funds to Honduran police units supervised by their national police chief until it investigates allegations that he ran a death squad a decade ago.
The State Department said it "is aware of allegations related to Police Chief Juan Carlos Bonilla."
The US had pledged $56 million (£35m) in security and development assistance for 2012 in Honduras, a major drugs pipeline to the US.
But Honduran President Porfirio Lobo's spokesman Miguel Bonilla said that the administration has repeatedly pledged full support for the police chief and that under his leadership "there has been a real improvement in the security situation."
A series of letters from Honduran and US academics and members of Congress have been sent to Secretary of State Hillary Clinton asking her to reconsider security aid.
"Combating drug trafficking is not a legitimate justification to fund and train security forces that usurp democratic governments and violently repress people," said a letter signed by hundreds of academics.