The Pacific Islands Forum leaders say they will consider the unprecedented step of suspending Fiji from the body unless the interim government recommits to holding elections under the current constitution by March.
Fiji has boycotted this week's Forum summit in Niue, upsetting the leaders who called Fiji's actions unacceptable.
The Forum leaders want the so-called Contact Group of foreign ministers to continue monitoring Fiji and report back within months.
Before the end of the year, the leaders intend holding a special meeting in Papua New Guinea to consider the ministers' report.
The New Zealand prime minister, Helen Clark, says the leaders have been offended by Fiji.
"They have also signalled that they are not going to just let the issue drop, they did accept undertakings in good faith, that there is no technical, administrative, managerial reasons why elections cannot be held by March next year. Only political will is lacking."
The new Forum chair, Niue's Premier Toke Talagi, says the Forum is not to be ignored
We're making a very strong statement with respect to the credibility of the Forum and its integrity that people should not consider the fact that the Forum is just a body to be ignored.
In a first reaction, Fiji's ousted Prime Minister has welcomed the Forum response to the Fiji crisis.
Laisenia Qarase says Forum leaders are displaying good leadership.
They have made right decisions, they are making good suggestions. Really they haven't got much choice else. They are doing what is best for Fiji and we can't ask them more than that. It is really up to the interim government now to accept those recommendations and suggestions, consider them very carefully without any emotion and then follow through.
Laisenia Qarase
