Nato says there is no provision for member states to be suspended or expelled from the military alliance after a report said the US could seek to suspend Spain over its Iran war stance.
Reuters quoted a US official who said an internal Pentagon email had suggested measures for the US to punish allies it believed had failed to support its campaign.
The email also suggested reviewing the US position on the UK's claim to the Falklands islands in the south Atlantic, which are also claimed by Argentina.
A Nato official told the BBC that the alliance's founding treaty "does not foresee any provision for suspension of Nato membership, or expulsion".
Spain's leader has also dismissed the report.
Pentagon Press Secretary Kingsley Wilson told the BBC that despite "everything" the US has done for its Nato allies, "they were not there for us".
She added: "The War Department [defence department] will ensure that the president has credible options to ensure that our allies are no longer a paper tiger and instead do their part.
"We have no further comment on any internal deliberations to that effect."
The BBC has contacted the UK government for comment.
US President Donald Trump has repeatedly criticised Nato allies for their reluctance to play a greater role after the US and Israel attacked Iran on 28 February and Iran subsequently restricted shipping through the key Strait of Hormuz route.
Spain has refused to allow the use of air bases on its territory for attacks on Iran. The US has two military bases in Spain, Naval Station Rota and Morón Air Base.
Spanish Prime Minister Pedro Sánchez told reporters: "We do not work based on emails. We work with official documents and official positions taken, in this case, by the government of the United States."
Sánchez added that Spain supported "full co-operation with its allies, but always within the framework of international law."
Meanwhile, UK Prime Minister Keir Starmer has insisted that greater involvement in the war or the current US blockade of Iran's ports is not in the UK's interest.
The UK has allowed the US to use British bases to launch strikes on Iranian sites targeting the Strait of Hormuz and RAF planes have taken part in missions to shoot down Iranian drones.
The UK, France and others have said they would be willing to keep the Strait of Hormuz - a global oil shipping route - open after a lasting ceasefire or the end of the war.
On Friday, US Defence Secretary Pete Hegseth used a news conference to again take aim at European allies for not helping Washington in its war against Iran.
"We are not counting on Europe, but they need the Strait of Hormuz much more than we do, and might want to start doing less talking and having less fancy conferences in Europe and getting a boat. This is much more their fight than ours," Hegseth said.
"Europe and Asia have benefitted from our protection for decades, but the time for free riding is over," he added.
Last month Trump said he had always considered the 32-member Nato defence alliance to be a "one-way street". "We will protect them, but they will do nothing for us," he wrote.
The internal Pentagon email said access, basing and overflight rights (ABO) were "just the absolute baseline for Nato", the unnamed US official told Reuters.
As possible retaliation for this perceived lack of co-operation, the email suggested reassessing American diplomatic support for longstanding European "imperial possessions" such as the Falkland Islands, Reuters quoted the US official as saying.
On Friday, Italian Prime Minister Giorgia Meloni urged Nato allies to stick together in the wake of the Pentagon memo, saying the alliance is a "source of strength".
"We must work to strengthen Nato's European pillar... which must clearly complement the American one," she told reporters at an EU summit in Cyprus.
A German government spokesperson said Spain's membership was not in question.
"Spain is a member of Nato. And I see no reason why that should change," the spokesperson said during a regular news conference in Berlin.
The Falklands, known in Argentina as the Malvinas, are about 8,000 miles (12,875km) from the UK and about 300 miles from mainland Argentina.
Argentina has long claimed sovereignty over the islands, a British overseas territory in the south-west Atlantic Ocean. The two countries fought a war over the issue, after Argentine forces invaded the islands in 1982.
Another option in the email outlined suspending "difficult" countries from important positions within the alliance, according to the official.
The official told Reuters that the memo did not suggest that the US could withdraw from the alliance, nor did it propose closing bases in Europe.
