The United States has recognized the re-election of Honduran president Juan Orlando Hernández, despite widespread allegations of fraud in last month’s election and calls from the Organization of American States (OAS) and US Congress to hold a new vote.

The state department issued a statement on Friday congratulating Hernández on his victory, but also urged the country’s electoral commission to fully review any challenges to the results.

“The close election results, irregularities identified by the OAS and the EU election observation missions, and strong reactions from Hondurans across the political spectrum underscore the need for a robust national dialogue. A significant long-term effort to heal the political divide in the country and enact much-needed electoral reforms should be undertaken,” said spokesperson Heather Nauert.

Nauert also urged “all sides” to refrain from violence amid unrest that has claimed at least 17 lives – most of whom were protesters killed by security forces.

The announcement comes after a month-long standoff between Hernández and his opponent, Salvador Nasralla, who both declared themselves winner amid opposition allegations of fraud.

On the night of the 26 November election, Nasralla was five points ahead of Hernández with nearly 60% of the vote counted – until election authorities stopped releasing results. When the count resumed 36 hours later, Nasralla’s lead had vanished, giving Hernández a narrow win.

The Honduran electoral commission, which is controlled by Hernández allies, named him the country’s next leader on Sunday. But the OAS said the process had been the subject of too many unexplained delays and irregularities “before, during and after” the vote to determine the outcome with certainty – and called for a repeat election.

The United States – which has no ambassador in the country or assistant secretary of state for the western hemisphere – appeared to throw its weight behind Hernández, but it held off formally congratulating him until the end of a five-day period in which the opposition could challenge the electoral body’s decision.

The decision came after Nasralla travelled to Washington DC to meet officials at the OAS and state department. US officials said that he did not present evidence to back up his allegations of fraud.

But analysts warn that in its attempt to maintain stability, the US could risk undermining its own interests.

“Over the short term, Hondurans are going to be upset and protest. Over the medium and long term they are going to withdraw from confidence in democracy and withdraw from confidence in a US commitment to democracy. Their trust will drop even further in their government,” said Fulton Armstrong, a professor at American University and former CIA analyst.

“The US is sacrificing support of the Honduran people and almost everything the US represents – democracy, anti-corruption – for what it thinks is stability. But how can you have stability without democracy?” he said.

Opposition supporters hold wooden crosses in front of security forces guarding the US embassy during a protest in Tegucigalpa, Honduras, on Thursday. Photograph: Jorge Cabrera/Reuters

Thousands of protesters gathered outside the US embassy in Tegucigalpa on Thursday night, carrying crosses bearing the names of those killed in the post-election violence.

US politicians have also condemned Washington’s refusal to call for new elections.

In a letter to the secretary of state, Rex Tillerson, on Thursday 20 members of the House of Representatives called for the US to support the OAS’s decision, noting the US “has spoken out forcefully to express concerns about electoral processes in Venezuela, Nicaragua, Bolivia and Cuba”.

Nearly 30 other lawmakers also sent a letter to Donald Trump calling on him to “suspend all security assistance to Honduras”, over abuses committed by security forces during the protests.

Just after the election, the United States certified Honduras was making progress on human rights, paving the way for the country to receive millions in aid, despite corruption scandals and human rights abuses that occurred under Hernández.

Honduras was one of nine countries that voted with Washington against a UN resolution condemning the Trump administration’s move to recognize Jerusalem as Israel’s capital.