Venezuela "earned their spot honestly" on the list of countries whose cooperation is unsatisfactory, said US State Department spokesman Sean McCormack.
Mr McCormack cited concerns over Caracas' ties with Iran and Cuba, which Washington considers state sponsors of terrorism, and their "intelligence-sharing relationship, which has made it very difficult for the United States to work on anti-terrorism efforts with them (Venezuela)."
"If you have a reasonable or rational expectation that somehow information that you share with them might make its way to just the groups that you're trying to combat, that's certainly negative," he said.
The US sanctions ban arm sales and technology transfers to Venezuela, another State Department spokesman confirmed.
"We are certifying to Congress that Venezuela is not fully cooperating with US anti-terrorism efforts," Eric Watnik, a spokesman for the State Department's Bureau of Western Hemisphere Affairs, told news agency AFP.
"US sales and licenses for the export of defence articles and services to Venezuela, including the retransfer of defence articles, will not be permitted," he said.
Unfazed
President Chavez has brushed aside America's suspension of arms sales.
"It's the empire and it has a great capacity to do harm to the countries of the world," he said, referring to the US as "an irrational empire".
But the Venezuelan leader also said his government would not respond with punitive measures such as travel restrictions.
"There's no way we will do that. We will find a solution to this," he told The Associated Press.
He also ruled out suspending oil supplies to the US.
"I am conscious of my responsibilities," the socialist leader said, adding that such a suspension would be "madness" because it would raise world oil prices "above 100 dollars a barrel,” Mr Chanvez said from London.
Mr Chavez, who often claims that Washington is planning to invade his country, said: "We have big friends in the world who are willing to help us to defend our country against imperialism. Down with imperialism."
Thorny relations
The Bush administration has had thorny relations with Mr Chavez, whose country is the fourth-largest supplier of oil to the US, at 1.5 million barrels per day.
Washington has charged President Chavez's government with restricting the freedom of the press and harassing the opposition, while Mr Chavez frequently criticises Mr Bush for the Iraq war and has openly called the US leader a "coward" and a "murderer".
The sanctions ratcheted up US moves to isolate Venezuela in the military sphere.
In January, Washington had intervened to prohibit the sale of US arms or military technology to Venezuela by third countries, such as Spain and Brazil.
The US blocked a sale by the Spanish government of 12 military aircraft with US components to Venezuela, accusing Mr Chavez's government of promoting "regional instability".
At the same time, it warned Brazil of the danger of selling military materiel to Venezuela. The Brazilian government was considering selling to Caracas 36 patrol aircraft which require US technology.
By contrast, Washington has been unable to block a sale by Russia of 100,000 Kalashnikov rifles. However, the Russian-made guns have not yet been delivered.
In Caracas, Venezuelan Foreign Minister Ali Rodriguez said the US sanctions were a "cynical" move and warned that American companies could be in breach of contract with Venezuela if they abide by the order.
"There are signed contracts, there is a legal, contractual obligation with American companies. There are helicopters being repaired that are used for (anti-drug trafficking) operations," Mr Rodriguez said.
In recent months the US has grown increasingly vocal in its opposition to President Chavez and his government. Secretary of State Condoleezza Rice has described Venezuela as the region's biggest problem and has called on US allies to mount a united front in dealing with it.