The United States is declaring its support for the threatened U.N. peacekeeping mission in the disputed territory of Western Sahara after Morocco took steps to reduce its size and terminate $3 million in funding.

At the same time, U.S. State Department spokesman John Kirby said in a statement released Friday night that Washington considers an autonomy plan put forth by Morocco for the territory to be "serious, realistic and credible," representing "a potential approach that could satisfy the aspirations of the people in the Western Sahara."

Kirby's statement comes at a time of an escalating dispute between Morocco and the United Nations over Western Sahara, a former Spanish colony that Morocco annexed in 1975. Morocco fought Polisario Front rebels seeking independence for Western Sahara until the U.N. brokered a cease-fire in 1991.