Seleka leaders reached a peace agreement with the CAR government in January. The rebels backed out later, saying the government wasn't upholding terms of deal.
The rebel group has since installed Michel Djotodia as president and defense minister.
African Union spokesman El-Ghassim Wane told Voice of America the alliance was working with the international community to find a suitable solution.
"We totally reject the act that has been taken by Seleka, that of course, includes the illegal decision by the head of Seleka to proclaim himself as president of the republic, to remain in power and to usher in a so-called transitional period," he said.
The U.S. government made similar claims last week, describing Seleka's actions as an illegitimate takeover by force.
Seleka suspended the constitution but said Prime Minister Nicolas Tinagaye would stay in power. The rebel group said elections were scheduled for 2016. The African Union suspended CAR's membership following the rebel takeover.
Sidiki Kaba, an honor president at the International Federation for Human Rights, said, "Coups have never been political solutions, not for Africa nor for the rest of the world."