The United States warned Egypt on Friday it would review some $1.3 billion in aid based on Egypt's response to massive protests, urging the government to rein in security forces and allow peaceful demonstrations.
Egyptian President Hosni Mubarak imposed a curfew and ordered troops to back police as they struggled to control crowds who flooded the streets of Cairo and other Egyptian cities to demand that Mubarak step down.
The protests have put the United States into a quandary of its own. Washington views Mubarak as a key partner -- a linchpin for future Israeli-Palestinian peacemaking and a bulwark against Iran's regional clout -- but U.S. officials have stressed this week their long-standing support for democratic reform in his country.
President Barack Obama and aides intensified their rhetoric as the protests continued, and the threat of a change in aid raised that pressure to a new level.
Washington gave Cairo $1.3 billion in military aid and $250 million in economic aid in the 2010 fiscal year, making it one of the largest U.S. aid recipients across the globe.
"We are watching very closely the actions of the government, of the police, of all the security forces and all of those in the military -- that their actions may affect our assistance would be the subject of that review."
U.S. Secretary of State Hillary Clinton pressed all sides to refrain from violence.
"We urge the Egyptian authorities to allow peaceful protests and to reverse the unprecedented steps it has taken to cut off communications," she told reporters in Washington, referring to the blocking of Internet social networking sites.
"These protests underscore that there are deep grievances within Egyptian society, and the Egyptian government needs to understand that violence will not make these grievances go away."
A U.S. official monitoring the events said the situation was fluid. "Unless something breaks the current tension, we are approaching the point where either the military has to crack down hard or the regime has to give way," the official said, speaking on the condition of anonymity.
Washington urged U.S. citizens to postpone non-essential travel to Egypt and said Americans who are in the country should stay indoors.
Clinton urged the Egyptian government to view civil society as "a partner" rather than a threat and she emphasized partnership in her remarks.
"Egypt has long been an important partner of the United States on a range of regional issues," she said. "As a partner, we strongly believe that the Egyptian government needs to engage immediately with the Egyptian people in implementing needed economic, political and social reforms."