Greece has protested strongly at a decision by the US to refer to the Former Yugoslav Republic of Macedonia (FYROM) simply as "Macedonia".
Greece summoned the US envoy to make a formal complaint
Greece has waged a long campaign to deny its northern neighbour use of the Macedonia name, which is also that of a northern Greek province.
FYROM President Branko Crvenkovski hailed a "great day" for his country.
Greece has made a formal complaint at "this unilateral US decision", saying it would have "many negative effects".
A US State Department official told BBC News that: "The US has decided to refer to Macedonia as the Republic of Macedonia."
The US said the decision was not meant to anger Greece, but to reward Macedonia for its commitment to democracy, the AFP news agency said.
Foreign ministry spokesman
George Koumoutsakos said US Secretary of State Colin Powell had telephoned to say "that the decision is not a turn against Greece
and is not linked to the US elections".
Greece and FYROM have held United Nations-led talks on the issue for more a decade.
The BBC's Matt Prodger says the US move will be a boost for the Macedonian government ahead of a controversial referendum aimed at overturning legislation giving more rights to the minority ethnic Albanians.
"Today is a great day for Macedonia and all Macedonians wherever they are," Mr Crvenkovski said.
"My message to the Greek government and to the Greek people is that the Republic of Macedonia is strongly determined to continue to build friendly and good-neighbourly relations."
But Greek Foreign Minister Petros Molyviatis said:
"Apart from our protest, I noted the many negative effects that this unilateral US decision will have."
He has cancelled a trip to the EU summit in Brussels to deal with the issue.
Successive Greek governments have refused to recognise the name "Macedonia", because they fear it implies a territorial claim on the northern Greek province of that name.
The name is also seen as a part of Greek heritage.
The dispute began with the break-up of the former Yugoslavia in 1991.
Greece imposed an economic embargo on its neighbour until it agreed to be referred to as the "Former Yugoslav Republic of Macedonia" - a name which most of its inhabitants dislike.
Last month, US Defence Secretary Donald Rumsfeld signed a co-operation agreement referring to the country simply as Macedonia.