The US has said a 'no' to the request made by Marshall Islands to compensate victims of the American nuclear weapons testing programme using grant money.
The US tested 67 nuclear weapons at Bikini and Enewetak atolls from 1946 to 1958 and a Nuclear Claims Tribunal was set up by the two governments to compensate those displaced or suffering health problems due to the tests.
But the 150 million dollars the United States provided for paying settlements ran out three years ago and the US State Department has said there is no obligation to pay more.
More than 22 million dollars remains unpaid for personal injury awards and about two billion dollars is outstanding for land damage awards made by the tribunal.
Although the United States helped set up the tribunal, the body acts independently and has made awards far in excess of the money it was given.
Marshall Islands President Litokwa Tomeing suggested that 1.2 million dollars annually from the grant money provided by the US to the Marshall Islands could be used to make make some of the tribunal payouts.
But the suggestion to redirect some grants used mainly for health and education was rejected by the United States in a letter released by the Marshall Islands government on Thursday.
"The purpose you suggest falls outside of the uses of sector grant funds and would not be an acceptable proposal," a letter from the US Interior Office told the president.
The Marshalls president's office said Tomeing would press ahead with efforts to find money to make the unpaid compensation payments, despite the US stance.
"The government cannot just sit back and say, 'We didn't cause this problem and we're sorry folks, but we can't help you,'" an official said.