The tussle became murkier as an American channel reported that Obama`s National Security Advisor Tom Donilon threatened to "kick out" the Pakistan envoy Hussain Haqqani, if Islamabad failed to release Davis by today.
But later, both Haqqani and a US embassy spokesperson in Pakistan termed the report as inaccurate.
Davis, 36, who was arrested for shooting down and killing two Pakistanis, was remanded to a further 14 days of judicial custody by a court till the next hearing on February 25.
Rejecting the self defence plea of Davis, Lahore police chief Aslam Tareen said they had framed murder charges against him after finding no proof to back his claim that he had shot and killed two men in self-defence.
"His self-defence plea was considered and keeping in view the witnesses and the forensic (reports), that has been rejected by the investigators," he told a press conference.
The killing of the two men was an "intentional" and "cold blooded murder," Tareen said.
The stand-off between Pakistan and the US over Davis, who Washington says enjoys diplomatic immunity, has taken the already tense relationship between the two countries to a new low.
The US has suspended all high-level contacts with Pakistan and reports have suggested they will not be resumed till Davis is freed. But, top Pakistani leaders have so far rebuffed US demands for Davis to be freed, saying the matter will be decided in court according to the country`s laws.
US lawmakers have also warned that the matter could affect American civil and military aid to Pakistan running into billions of dollars.
Meanwhile, officials in Lahore said police are expected to submit a `challan` or charge-sheet against Davis in court after the completion of his judicial remand.
The ABC report earlier said that US NSA Donilon told Pakistani envoy Haqqani on Monday that the Obama administration will "kick him out of the US", close consulates in Pakistan and cancel President Asif Ali Zardari`s upcoming visit to Washington if Davis is not released by Friday.
Haqqani denied the development via Twitter, saying in a message that no "US official, incl the NSA, has conveyed any personal threats 2 me or spoken of extreme measures".
The US embassy in Islamabad also denied the report terming it as "simply inaccurate".
A brief statement issued by the US Embassy`s spokesperson said: "Although we are unable to discuss the substance of a private diplomatic meeting, US Embassy Islamabad can state categorically that the description of the conversation in this report is simply inaccurate".
Davis has claimed that he opened fire after the two armed men followed his car and tried to rob him on January 27 in a Lahore market.
A third Pakistani died after he was hit by a US consulate care rushing to aid Davis.
Davis was initially identified as a consulate official but the US later said he was a diplomat and enjoyed immunity under the Vienna convention.
Video emerged this week of Davis showing his State Department credentials to Pakistani police officers during an interrogation and saying, "I`m a consultant".
Davis was brought to the judicial magistrate`s court in Model Town area of Lahore in an armoured vehicle amidst tight security today.
In an apparent attempt to confuse a large number of local and foreign journalists tracking the movements of Davis, police sent two armoured vehicles to as many courts.
Shortly after the court gave its order, Davis was taken to Kot Lakhpat jail. Authorities had recently made special arrangements for him at the prison.
Earlier, Davis was presented before the judicial magistrate on January 28, when he was remanded to police custody till February 3.
The remand was subsequently extended till February 11.
A report in the News daily said today that the Punjab government will deploy multiple security cordons, including that of Rangers, in the Kot Lakhpat Jail "to pre-empt a possible Hollywood Rambo-style sting operation by the US forces to get Raymond Davis released".