"As a result of the review directed by President (Barack) Obama, we have decided to maintain our relationship with the Egyptian government while recalibrating our assistance to Egypt to best advance our interests," State Department spokesperson Jen Psaki said on Wednesday.

The new Egyptian government, a senior administration official later told reporters on condition of anonymity, has made decisions inconsistent with inclusive democracy, which sort of leads the United States to take such a decision.

The official confirmed that this includes suspension of USD 260 million of cash transfer to Egypt. "We will not provide cash assistance to the interim government...We've decided to hold delivery of certain of the large-scale military systems. These would include, for instance, as Senior Administration Official Number One already mentioned, the F-16s. It also includes the M1A1 tank kits, Harpoon missiles, and Apaches," the official said.

"On the recalibration of the economic assistance programmes, we will work with the government of Egypt to really reshape and restructure the current and existing programmes that we have to really focus more on, on what is directly benefiting the Egyptian people," another administration official said.

"We're going to continue to fund some of the Egyptian-American Enterprise Fund which we're doing, which is very, very focused on supporting the private sector. So we'll continue with our education programmes, our health programmes. So, it's restructuring and recalibrating the things that will benefit directly the Egyptian people," the official said.

Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, supported the decision of the Obama Administration.

"Ongoing violence in Egypt is troubling, shows no signs of abating, and given these worrisome developments, a pause in assistance is appropriate until the Egyptian government demonstrates a willingness and capability to follow the roadmap toward a sustainable, inclusive and non-violent transition to democracy.

"The interim government and Egyptian armed forces bear the burden of responsibility for ensuring security and safety for all Egyptians," Menendez said.

At the same time, the White House insisted that US is not halting all military aid to Egypt.

"The reports that we are halting all military assistance to Egypt are false," White House Press Secretary Jay Carney said.

"As the President said in his speech at the United Nations, our overriding interest throughout these past few years has been to encourage a government that legitimately reflects the will of the Egyptian people and recognizes true democracy as requiring the respect for minority rights, the rule of law, freedom of speech and assembly, and a strong civil society," he said.

"That remains our interest today. We will continue to work with the interim government to promote our core interests and to support areas that benefit the Egyptian people," he said.

"The President was also clear, and has been clear, that we are not able to continue with business as usual. And as you know, we have already announced that we are not proceeding with the delivery of certain military systems. Following on the results of the review directed by President Obama, we will announce the future of our assistance relationship with Egypt once we have made the appropriate diplomatic and congressional notifications," Carney said.


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