US congressmen are defending a bill threatening to impose sanctions on Ethiopian officials and stop military aid unless democratic reforms are made.
Legislator Donald Payne told the BBC the House of Representatives passed the bill "because there has been a serious problem with democracy in Ethiopia".
Ethiopia’s ambassador to the US criticised the proposal saying it would "undermine regional stability".
Ethiopia is the US’s strongest ally in the region in its "war on terror".
The legislation now passes to the Senate for approval and can be vetoed by the president.
Correspondents say Ethiopia has come in for increased criticism over its human rights record since the violent crackdown on post poll protests in 2005; opposition leaders imprisoned as a consequence have subsequently been released.
And since Ethiopia’s went into Somalia last December to help the transitional government- a rebellion in its eastern Ogaden region which borders Somalia has escalated.
The US representatives approved the Ethiopian Democracy and Accountability Act on Tuesday, which puts Ethiopian government officials at risk of being denied entry visas over human rights violations.
It also threatens to withhold military aid of at least $1.5m
Mr Payne said the bill was bipartisan and secured unanimous approval.
"It’s something that’s been discussed ever since the killing of civilians, gunned down in the streets of Addis [Ababa] almost two years ago," the Democratic Congressman told the BBC’s Network Africa.
"There was a feeling that Ethiopia, being an ally of the United States, should have an opportunity to correct some of the wrongdoings, and that has not happened.
"Two years later people are still being imprisoned. There’s still problems in the Ogaden region. People are having food kept away from them. That’s why we finally said we need to move forward with it."
Samuel Assefa, Ethiopia’s ambassador to the US, called the bill "irresponsible" and said it would hamper efforts to improve things.
"The legislation also would undermine regional stability in the Horn of Africa by jeopardising vital security cooperation between the United States and Ethiopia," he said in a statement, Reuters news agency reports.
The BBC’s Elizabeth Blunt in Addis Ababa says as Ethiopia is such a strong ally of the US in the Horn of Africa, it is unlikely that President George Bush’s administratation will be sympathetic to the bill.