National Security Advisor Tom Donilon told Pakistani envoy Hussain Haqqani 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 US official Raymond Davis is not released by Friday, ABC News channel quoted two unnamed Pakistani officials as saying.
Donilon reportedly conveyed the warning to Haqqani on Monday evening.
The "outlines of the threat" were also confirmed to ABC News by a senior US official who was not authorized to speak on the record.
White House spokesperson Tommy Vietor declined comment.
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".
Davis, 36, was today sent to jail for 14 days by a court in Lahore even as city police chief Aslam Tareen said he had been charged with murder as there was no proof to back his claim that he had acted in self-defence when he shot and killed the two men on January 27.
Davis has claimed that he opened fire after the two armed men followed his car and tried to rob him.
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 is in Pakistan on a diplomatic passport and the US has demanded his immediate release on the grounds that he enjoys diplomatic immunity.
The stand-off between Washington and Islamabad has taken the tense relationship between the two countries to a new low.