The United States has not lifted its restrictions on Maher Arar, even though the Canadian government apologized to him on Friday and offered him a $10.5 million compensation package.

'We remain convinced that Mr. Arar's presence on the watch list is appropriate.'-U.S. State Department

Arar, a Canadian citizen who was born in Syria, was detained in 2002 by U.S. authorities who suspected him of terrorist links and deported him to his homeland, where he was jailed and tortured. Arar's name was later cleared by a Canadian judicial inquiry, which blamed his deportation in part on the RCMP.

The U.S. State Department said Friday it would keep Arar on its security watch list, even though Ottawa has been pushing for his name to be removed.

"We remain convinced that Mr. Arar's presence on the watch list is appropriate," the department said in a statement. "Ultimately, the United States will decide for itself who is or isn't on the watch list."

The U.S. ambassador to Canada, David Wilkins, said the United States would not change its mind.

"This is a situation where our two countries will continue to disagree," Wilkins said in a written statement.

Harper issues strong rebuke

Prime Minister Stephen Harper, as he formally apologized to Arar and his family on Friday and offered the compensation, also issued his strongest rebuke yet to Wilkins. The ambassador told Ottawa earlier in the week to back off from its demands that Arar be taken off the list.

'Canada has every right to go to bat for one of its citizens when the government believes a Canadian is being unfairly treated.'-Prime Minister Stephen Harper

"Canada has every right to go to bat for one of its citizens when the government believes a Canadian is being unfairly treated," Harper said.

In December, Wilkins revealed that Arar had never been removed from the watch list, which restricts him from travelling to the United States.

The Canadian judicial inquiry released a report in September 2006 concluding U.S. authorities may have detained Arar at a New York airport and deported him in part because the RCMP had given misleading information to American authorities that wrongly alleged Arar may be linked to terrorists. The inquiry also concluded there was no evidence to support such claims.

Arar's contacts, travel history said to be issues

On Friday, a State Department official told the Canadian Press that Arar remains on the U.S. watch list because of his personal associations and travel history.

The official did not want to be identified by name.

The official stressed that while Arar's associations and travel history do not warrant his presence on a Canadian security list, they do qualify him for the U.S. list.

Public Security Minister Stockwell Day said Friday that the government will continue to work to remove Arar from the American list.

"The issue won't be closed," Day told CBC News. "This conversation will come up again."

With files from the Canadian Press