An embassy statement did not spell out the reason for canceling the event.
Jordanian Information Minister Taleb Rifai said in a telephone interview Thursday that the "embassy is free to take whatever measures it deems appropriate, but we don't believe that such action is necessary at all."
At a State Department briefing Thursday, spokesperson Phil Reeker said, "The U.S. has full confidence in the Government of Jordan's demonstrated ability and willingness to address security threats, but the Embassy there decided to take this preventative measure to further minimize the chance of any incident there."
A statement on the embassy's web site read: "The Embassy of the United States of America regrets to announce the cancellation of its reception in celebration of the 224th anniversary of the independence of the United States of America, which was scheduled for July 4 at the Ambassadors Residence on the Embassy compound. We regret any inconvenience to our guests."
Roughly 1,000 U.S. nationals live in Jordan.
The cancellation comes a week after the embassy said the U.S. government "has information concerning terrorist targeting" the compound in Amman.
Spokesperson Reeker said he believed the decision to cancel the July 4th celebration was based on the same information that led the embassy to issue the security warning a week ago and that he knew of no new threats to the embassy.
Last week, eyewitnesses in the Jordanian capital said dozens of workers put sand bags around the walls of the heavily fortified U.S. embassy compound.
At that time, the embassy said it could not rule out other possible targets in the country, and urged Americans traveling or residing in Jordan to "exercise prudence and review their security practices, and to remain alert to changing situations."
In Brussels, Belgium, three U.S. diplomatic missions have also decided to cancel a July 4 street party due to security concerns, Reeker said.
Reeker attributed the cancellation to the "particular security situation and the physical situation of that event."
The plan had been for the event to be held in a tent on a closed street.
Last December, the Jordanian government said 28 Arabs suspected of links with Osama bin Laden had planned to carry out terrorist attacks against American and Israeli tourists during New Year's celebrations in Jordan.
Sixteen have been arrested and are on trial in a military court. They have pleaded innocent and denied links to bin Laden, the Saudi exile. The rest are being tried in absentia.
Bin Laden, who is based in Afghanistan, is wanted by the United States for allegedly causinexplosions at two U.S. embassies in east Africa in 1998 that killed more than 200 people.