The Marshall Islands foreign minister has criticised the Compact of Free Association memorandum of understanding (MOU) signed at the start of the year, calling it "not a dignified agreement".
Jack Ading made the comments during a US congressional hearing in Washington last week.
The Marshall Islands wants more money to cover nuclear testing compensation before it formally signs with Washington.
The US has already signed off on the strategic agreement with Micronesia and Palau, with the economic terms of the Marshall Islands compact scheduled to expire on September 30.
The agreements give the US exclusive access for military purposes over the countries, while requiring the superpower to protect the three countries and provide economic assistance.
The Marshall Islands signed the MOU in January, however, Ading said it was signed without the consent of the Compact Negotiations Committee and Cabinet.
"We appreciate what was addressed in that MOU but we feel like there are other issues that needed to be included especially additional funding for the nuclear populations," he said.
In a statement prior to the congressional hearing, Ading said most Americans would be "shocked and embarrassed if they were to learn about the history and legacy of the nuclear testing programme".
The US tested 67 nuclear weapons in the Marshall Islands from 1946 to 1958 - including its largest bomb ever detonated in 1954 on Bikini Atoll - resulting in numerous health effects.
In his statement Ading said almost 70 percent of the children under the age of 10 on Rongelap Atoll - about 150km east of Bikini Atoll - eventually developed thyroid tumours.
"And many women from several atolls, Utrik for example, later gave birth to babies who resembled jellyfish and peeled grapes, incidents similar to mothers in Utah who were downwind from the Nevada test site."
He said the 1986 settlement was the result of "a lopsided negotiation between a superpower and an impoverished island community".
'There is no more money'
But chief US negotiator Joseph Yun said the nuclear liability issue had been settled in the 1980s.
He also said the MOU contained $US700 million for a trust fund that could be used for nuclear-affected atolls.
"I have told my Marshallese colleagues, 'listen, there is no more money'," Yun said.
The MOU offered a total of $7.1 billion over the next 20 years for all three freely associated states.
RNZ Pacific's Marshall Islands correspondent Giff Johnson said the nuclear legacy was not something the US could give a "few cents on the dollar" to and leave.
"Here we are in 2023 and there's an opportunity.
"The US and the Marshall Islands could come up with a deal that's satisfactory to both sides."
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Johnson said he thought the Marshall Islands was in a good position to ask for more money because of the new geo-political environment in the Pacific with China more influential.
"It opens a doorway for getting the US to consider a just and fair settlement."
Johnson said the US could "play hardball" for signing the MOU and penalise the nation when the compact's economic terms expire.
"[But] how would it look to the US allies in the Pacific if the US isn't willing to take care of its most important partners in the north? How's it going to deliver on all these promises it's making to people in the south Pacific."