The object triggered a massive police operation and considerable disruption for residents and businesses in the vicinity of the embassy on Henrik Ibsens gate in central Oslo on Tuesday morning.
The embassy called the police at around 11.30am on Tuesday morning to report that a suspicious package had been spotted.
The Oslo police bomb squad was swiftly dispatched to the scene and was able to conclude that the item was harmless.
According to a police statement it had been concluded that the item belonged to the embassy and was intended for training purposes. Embassy staff had simply forgotten to remove it from under the parked car.
The embassy has since formally acknowledged that the object in question indeed belongs to them and Oslo police have apologized for the disruption caused.
The mishap has led to calls from local Oslo city councillor Stian Berger Røsland for the Americans to compensate the city for the false alarm.
"If the sloppiness of the US embassy is to blame for the drama in Oslo, then it has to be expected that an apology is made and some form of financial compensation is made," Røsland said.
Johan Fredriksen at Oslo police has meanwhile said that while it is regrettable when mistakes are made, this type of alarm has to be taken seriously.
"The police showed a professionalism in how we handle these types of situations. We are now going to work to see that we avoid this type of situation in the future," he said.