A member of the Amhara Special Forcess stands at the border crossing as people cross from Eritrea, in Humera, Ethiopia. AFP
"This unilateral sanction, that shifts blame to and scapegoats Eritrea on the basis of spurious allegations, is in contravention of international law, and constitutes a flagrant breach of... sovereignty", the ministry of information said in a statement.
The US imposed the new measures on Friday, in response to Eritrea's decision to send troops in Ethiopia's Tigray region to back Prime Minister Abiy Ahmed in the war against the Tigray People's Liberation Front (TPLF) rebel group.
Eritrean and Ethiopian forces have been accused of carrying out mass rapes in Tigray and Washington has repeatedly urged Asmara to pull out of Ethiopia, including when US special envoy Jeffrey Feltman met President Isaias Afwerki in May.
On Saturday Eritrea said the sanctions reflected a "misguided and hostile policy" by the US, and were based on false allegations.
"That the primary aim of the illicit and immoral sanctions is to inculcate suffering and starvation on the population so as to induce political unrest and instability is patently clear," it said.
The sanctions targeted the Eritrean Defense Force and President Isaias's political party, the People's Front for Democracy and Justice, as well as other players in the authoritarian state.
"Eritrean forces have operated throughout Ethiopia during the conflict and have been responsible for massacres, looting and sexual assaults," a Treasury Department statement said.
The US has warned that Ethiopia risks "implosion" without a negotiated settlement, with Secretary of State Antony Blinken threatening to impose sanctions against Abiy's government and the rebels unless they move forward on talks.
The United States has condemned both the TPLF and Abiy, a onetime ally and Nobel Peace Prize winner, over a year of bloodshed that has left hundreds of thousands in famine-like conditions.
"We are not imposing sanctions at this time on elements aligned with the government of Ethiopia and TPLF to allow time and space to see if these talks can make progress," Blinken said, ahead of a three-nation trip to Africa next week.