At President Joe Biden's request, Defense Secretary Lloyd Austin and top military officials considered shooting the balloon down but decided doing so would endanger too many people on the ground, a senior defense official told reporters.
The official said the balloon flew over the US northwest where there are sensitive airbases and strategic missiles in silos underground.
"Clearly, the intent of this balloon is for surveillance, and the current flight path does carry it over a number of sensitive sites," said the official, who spoke on condition of anonymity.
But the Pentagon did not believe it constitutes a particularly dangerous intelligence threat.
"We assess that this balloon has limited additive value from an intelligence collection perspective," the official said.
The balloon entered US airspace "a couple days ago," the official said, adding that US intelligence had been tracking it well before that.
After Biden asked about the options for dealing with it, on Wednesday Austin, who was in the Philippines, held discussions with top Pentagon officials.
Fighter jets were flown to examine the balloon while it was above Montana as discussions took place.
- 'Seriousness' of issue -
But the Pentagon decision was "not to take kinetic action due to the risk to safety and security of people on the ground from the possible debris field," the official said.
Pentagon spokesman Pat Ryder confirmed the balloon was still being tracked over US airspace.
"The balloon is currently travelling at an altitude well above commercial air traffic. It does not present a military or physical threat to people on the ground," Ryder said in a statement.
China has sent surveillance balloons over the United States in the past.
However, this one has lingered in US airspace much longer, the senior defense official said.
"We are taking steps nevertheless to protect against foreign intelligence collection of sensitive information," the official said.
The balloon's presence comes amid slowly simmering tensions between the United State and China over Taiwan.
China says it is determined one day to reunite the independently governed island with the mainland, by force if necessary.
But the United States has been arming Taiwan to defend itself, and Biden has said Washington would help protect Taiwan if China attacked.
Austin was in the Philippines this week to strengthen US defense cooperation, including gaining wider access for Pentagon forces to Philippine military bases, in a move that highlights the US view of China as a threat to East Asia.
The defense official said the issue of the balloon had been raised with Beijing officials.
"We have communicated to them the seriousness of the issue," the official said.
"We have made clear we will do whatever is necessary to protect our people in our own land."
This story has been published from a wire agency feed without modifications to the text.
