Mr Thaci was due to meet Donald Trump at the White House this weekend. He was due to meet Trump and Serbian President Aleksandar Vučić for a summit with reports claiming Trump was due to approve a deal for Belgrade to recognise Kosovo’s statehood. Mr Thaci returned to Kosovo without landing.
Avdullah Hoti, Kosovo Prime Minister, was nominated to attend as a replacement but declined after the US backed the indictment.
The embassy said in a statement the move was “a step forward in the justice and reconciliation process in the western Balkans”.
Mr Thaci has been indicted on ten counts involving the murders of almost 100 people during and after the Kosovo War.
Gramos Bucinca, a social activist in Pristina, told The Times: “There are voices that say justice must be served and then there’s the common folk who suffered, who say that Serbia must be the one who answers first for crimes committed.”
Mr Thaci has denied any wrongdoing.
The accusations are being accessed by a judge and the Kosovo Specialist Chambers who will decide if the case goes to trial.
The Special Prosecutor’s Office (SPO) has said: “The Indictment is only an accusation.
“It is the result of a lengthy investigation and reflects the SPO’s determination that it can prove all of the charges beyond a reasonable doubt.”
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“Any such claim would leave a permanent spot on Kosovo, its commitment to the rule of law would be under question, justice for victims would be denied and Kosovo’s future would be blurred.”
The United States and the UK both recognised Kosovo on 18 February 2008.
Kosovo had declared independence the day previous.
The Kosovo War lasted from February 1998 until June 1999.
Yugoslav forces took on the Kosovo Liberation Army rebel group.
The Kosovo Liberation Army, of which Mr Thaci was a member, was backed by NATO forces.
At the end of the conflict, Yugoslav and Serbian forces withdrew from Kosovo.
Kosovo was placed under United Nations administration after the conflict.
The US and Kosovo have established full diplomatic relations.