After recognising Morocco's sovereignty, the United States on Sunday started the "process of establishing" a consulate in contested Western Sahara, reported AFP.
Notably, the move comes after Morocco joined the United Arab Emirates (UAE), Bahrain and Sudan in agreeing to normalise ties with Israel under US-brokered deals, last year.
US ambassador David Fischer visited the port of Dakhla, 1,440 kilometres (895 miles) southwest of Morocco's capital Rabat to mark the start of work on a diplomatic office.
"It is such an honour for me to visit this stunningly beautiful and critically important region of Morocco, and to begin the process of establishing a US diplomatic presence here," Fischer said, according to the US embassy.
He called his visit "another historic milestone in more than 200 years of friendship" between Morocco and the US.
Western Sahara is a disputed and divided former Spanish colony that is mostly under Morocco's control, where tensions with the pro-independence Polisario Front have simmered since the 1970s.
"Morocco feels stronger in its legitimate fight for its territorial integrity... with the support of its friends," Foreign Minister Nasser Bourita said on Sunday.
The Algerian-backed Polisario Front fought a war for independence from 1975 to 1991 and controls about one-fifth of the desert territory.
UN peacekeepers in Western Sahara are mandated to organise a referendum on self-determination for the region, and despite Washington's move, the UN insists its position is "unchanged".
In November, the Polisario announced it regarded a 1991 ceasefire as null and void after Morocco sent troops into an UN-patrolled buffer zone to reopen a key road.
In December, the US State Department opened a "virtual" diplomatic post in Western Sahara, ahead of finding "an appropriate site" to build a consulate.
The building is expected to be ready in coming months, Fischer added.