(CNN) -- The African Union has suspended the Ivory Coast from the organization amid the country's political chaos following a November runoff election, it said in a statement.
The group suspended the Ivory Coast "in all AU activities, until such a time the democratically-elected president effectively assumes state power," the statement said.
The move came after West African leaders Tuesday called on President Laurent Gbago to acknowledge the results of the runoff and hand over power to his challenger, Alassane Ouattara. Both Gbagbo and Ouattara claimed victory after the November 28 voting.
On Tuesday, the 15-member Economic Community of West African States (ECOWAS) said it was suspending the Ivory Coast from all of its decision-making bodies until further notice. The suspension came following a meeting including the presidents of seven member states.
Ivory Coast's Constitutional Council invalidated earlier results from the Independent Electoral Commission that named opposition candidate Ouattara the winner, and Gbagbo was sworn in for a new term on Saturday.
The AU said it endorses the ECOWAS decision to recognize the results from the Independent Electoral Commission as certified by the U.N. mission in Ivory Coast. It said it "strongly urges Mr. Laurent Gbagbo to respect the results of the election and to facilitate, without delay, the transfer of power to the president-elect."
The political chaos has heightened fears that the Ivory Coast would once again plunge into the unrest and bloodshed suffered after a civil war broke out in 2002. The European Union has warned that Ivory Coast could face sanctions if the dispute is not resolved swiftly, and France has urged military and civilian authorities in its former colony to respect the will of the people.
The AU, in its statement Thursday, called upon Ivory Coast residents, "at this delicate stage in the history of their country, to exercise utmost restraint and to refrain from any action that could jeopardize peace and the process for a way out of the crisis." The organization is concerned about the "humanitarian consequences," and condemns the loss of life and destruction of property that have occurred in some parts of the country, it said.
In Washington, State Department spokesman P.J. Crowley said earlier the United States is concerned about the "risk of violence" if Gbagbo fails to recognize the results.
"There are two paths that he can take: one that leads to continued progress for his country and its people, preservation of the institution of democracy; and one that maintains Cote d'Ivoire's role as a leader in Africa," Crowley said, using the French name for the country. "The other path is one that leads to isolation from the global community and most particularly from the African neighbors of Cote d'Ivoire. We hope that President Gbagbo in the coming days will make the right choice."
Once a prosperous nation and a driving force in West Africa, the Ivory Coast spiraled downward into instability after fighting erupted between the government-held south and discontented Muslim rebels living in the north. Thousands of people died in the conflict.
Ouattara, a former economist for the International Monetary Fund who served as prime minister, had been banned from previous races. He enjoys popular support in the rebel-held north, and Gbagbo has accused Ouattara of masterminding the civil war -- an allegation the challenger has denied.
CNN's Christian Purefoy contributed to this report.