The assessment was outlined in a letter sent by US Secretary of State Antony Blinken to House Speaker Mike Johnson, the report said.
Blinken reportedly wrote that the determination would not cause delays to the delivery of any type of assistance to Israel, which will also receive the full amount appropriated by Congress.
On Saturday, the Axios news website reported that Blinken would announce sanctions against Israel's Netzah Yehuda battalion within days. The sanctions will be related to incidents in the West Bank prior to Hamas' October 7 attack on Israel. Netzah Yehuda is reportedly made up of young, radical Jewish settlers who have not been accepted into other IDF units.
Sanctions were also expected to target other military and police forces in Israel involved in rights violations. The US Department of State has been investigating the Israeli military units for more than a year due to potential violations of human rights.
Israeli Prime Minister Benjamin Netanyahu said on Sunday that he would fiercely oppose any sanctions, while Israel's national security minister, Itamar Ben-Gvir, warned that sanctions against the unit would be a "red line."