"Those who continue to obstruct progress on the reform agenda jeopardize their relationship with the United States and our partners and open themselves up to punitive actions," Hale said.
"Today there’s been very little progress but its not too late," Hale said, adding that Washington has long called for Lebanon’s leaders to show sufficient flexibility to form a government that "is willing and capable to reversing the collapse that is underway."
He added that the US and the international community are ready to help, saying that "the time to form a government, not block it, is now. The time to build a government is now. The time for comprehensive reform is now."
Hale accused Hezbollah and Iran of undermining the state but said that talks with Iran on reviving a 2015 nuclear deal could foster regional stability. "That would only be the beginning of our work" as the United States addresses "the other elements of Iran's destabilizing behavior."
While pledging not to abandon US interests in Lebanon, Hale said resolving a maritime border dispute with Israel would "have potential to unlock significant economic benefits for Lebanon."
During his talks with Hale, Aoun demanded that Israel halt all exploration in the Karish gas field, and defended Lebanon's move to expand the area it claims.
"Lebanon is within its rights to evolve its position according to its interest and as suitable under international law," Aoun told Hale, according to a statement from the presidency.
Aoun "demanded international experts ... draw the line according to international law," the statement said.
He also called for a "commitment to not carry out any oil or gas activities and not start any exploration in the Karish field and its adjacent waters" until the matter was settled.
The two countries launched negotiations last year, a culmination of a decade of US diplomacy, which have since stalled. The dispute has held up offshore exploration in the eastern Mediterranean. While Israel pumps gas from offshore fields, Lebanon has yet to find commercial reserves.
Hale later met with caretaker Prime Minister Hassan Diab. The US official, who arrived in Beirut Tuesday night, had held talks with a number of officials Wednesday, including Prime Minister-designate Saad Hariri and Parliament Speaker Nabih Berri.
Meanwhile, Hariri flew to Moscow Wednesday night where he is expected to discuss with senior Russian officials the stalled Cabinet formation process and economic assistance.
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