A diplomatic standoff between America and Pakistan may intensify after a Pakistani police official said the police will recommend murder charges for American diplomat Raymond Davis for committing a “clear murder” of two Pakistanis last month.

Meanwhile, the US threatened to oust the Pakistani ambassador and close down US consulates in Pakistan if its official was not freed immediately.

Davis, 36, who has been jailed since the shoot-out on January 27, was ordered by a court to remain in detention last Friday for two more weeks.

Davis said he had killed the two men as they tried to rob him at gunpoint at a busy intersection in Lahore. While US officials demanded his release as Davis qualifies for diplomatic immunity from prosecution on grounds of being a embassy staffer, Pakistan is under pressure from public to try Davis and has said the matter is up to the courts.

Aslam Tareen, police chief in the eastern city of Lahore told reporters on Friday one of the two killed had pointed a gun at Davis but investigators had determined although the weapon was loaded there was no bullet in the chamber. Tareen said the other man was shot in the back as he was trying to run away.

It was a clear murder, and we have proof of that. He gave no chance of survival to them, said Tareen without clarifying how the position of the bullets in the pistol had disqualified Davis’s claim of self-defense.

Pakistani police officials said in a report that claashed with Tareen's comments that the two Pakistanis who were killed had robbed two others of their cellphones earlier on the same day, which were found in their possession. One of the motorcyclists had cocked a gun aimed at Davis while he was stopped by the intersection, the report said.

The incident led to a third death when a speeding U.S. consulate vehicle coming to the rescue of Davis overran a motorcyclist.

We regret that this incident resulted in loss of life. However, eyewitness reports on the day of the incident showed the American diplomat acted in self-defense. There is no doubt he has diplomatic immunity, and we are working with the government of Pakistan to resolve the issue,” said Courtney Beale, a U.S. Embassy spokeswoman.

Meanwhile, the US has suspended high-level diplomatic ties with Pakistan and has sent signals that the alliance between the two nations including $1.5 billion in US annual aid may be under threat.

President Barack Obama's national security advisor Tom Donilon also warned that an upcoming visit by Pakistan's President Asif Ali Zardari to Washington could be cancelled if Raymond Davis was not freed.

Media reports said Donilon summoned Ambassador Husain Haqqani to the White House on Monday to convey Obama’s message to free Davis or face the consequences though Haqqani denied this via Twitter.