Initially find American to be in genuine denial (7)
I believe the answer is:
refusal
'denial' is the definition.
(refusal is a kind of denial)
'initially find american to be in genuine' is the wordplay.
'initially' indicates taking the first letters.
'american' becomes 'us' (**).
'to be in' is an insertion indicator.
'genuine' becomes 'real' ('real' is associated in meaning with 'genuine').
The initial letter of 'find' is 'f'.
'f'+'us'='fus'
'fus' going within 'real' is 'REFUSAL'.
(Other definitions for refusal that I've seen before include "Rebuff" , "Seal fur (anag.)" , "Declining of an offer" , "fault in the show ring" , "Negative response" .)