Brazil has rejected some $40 million in U.S. funds for fighting AIDS because of a guideline that requires officials to publicly condemn prostitution.
Brazil is thought to be the first country to reject U.S. AIDS funds because of the ideological guidelines that accompany them.
Officials say that condemning prostitution would damage their efforts to protect sex workers from contracting and spreading the disease. The head of Brazil's HIV-AIDS program also says the requirement infringes on the country's right to structure its own health policies.
U.S. officials say Brazil has the right to reject the funds and pursue their own policies.
Brazil's AIDS program has been praised by health groups for its effectiveness in curbing the spread of the sexually transmitted disease.
In 2003, Washington required organizations that receive funds from the U.S. Agency for International Development to adopt policies opposing prostitution and sex trafficking.