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 Even as Egypt prepares for elections this month that could give
new legitimacy to the country's military-backed leaders, many Obama
administration officials question the need to restore Egypt to its
place as the premier U.S. partner in the Arab world.
Washington's caution reflects a desire to help Egypt nip a mounting
insurgency in the bud without being seen as sanctioning the interim
government's repression of political opponents and the media.
The focus of bilateral aid, at least for the time being, is on
confronting the militant threat and other security issues while U.S.
officials assess how the country's next government responds to
demands to halt the harsh treatment of dissent.
"Going back to the status quo of the past 30 years is not really an
option that's available to us," a senior administration official
said on condition of anonymity.
Egypt has been the second-largest recipient of U.S. foreign aid
since its landmark peace treaty with Israel in 1979. But the policy
was upended by the political transformations triggered by the 2011
popular uprising that toppled President Hosni Mubarak.
 After the army last July ousted Mohamed Mursi, the Islamist leader
elected after that uprising, Washington responded by freezing much
of the annual $1.3 billion in military aid.
On April 22, the U.S. government relaxed its position and said it
would provide $650 million in military financing, a move which
required Secretary of State John Kerry to certify Egypt was
maintaining its peace treaty with Israel. It also announced that it
separately would send Egypt 10 U.S. Apache helicopters to help it
fight insurgents.
Washington continues to withhold hundreds of millions of dollars
more in aid, along with other hardware that Egypt had requested,
including Harpoon missiles and fighter jets.
"Egypt is a very hard country to support right now, even in
Washington among those who are strong defenders of the
relationship," said Amy Hawthorne, a former State Department
official now with the Atlantic Council, a Washington think tank.
"This recent aid decision is about getting parts of our relationship
back on track - but it's far from a warm embrace."
Egypt has pursued a campaign against the Muslim Brotherhood, the
Islamist party that propelled Mursi to power. Western officials have
condemned mass death sentences for Muslim Brotherhood supporters as
well as repression of other opposition parties and imprisonment of
some journalists.
"The Obama administration wants to keep working with Egypt on
regional security and counterterrorism - but at the same time it
wants to send a message about the political transition and the need
for greater respect for basic human rights," said Brian Katulis, an
analyst at the Center for American Progress.
"In trying to split the difference between these two goals, the
United States has sent an unclear message to Egyptians."
 SOLDIER TO SOLDIER
David Schenker, a former Pentagon official now at the Washington
Institute for Near East Policy think-tank, said the Defense
Department was eager to move America's strategic relationship with
Egypt back to a more normal footing.
Egypt has been key to U.S. military activity in the region, allowing
U.S. aircraft to fly over Egypt and facilitating U.S. ships' transit
in the Suez Canal.
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The timing of the decision last month to resume the $650 million in
military financing was driven mainly by the U.S. government's need
to make payments at the end of April to defense contractors who
deliver military assistance to Egypt, U.S. officials said. The move
was made in spite of worries about the direction the military-backed
government has taken. "They've taken steps whenever they've been
forced to act for
budget or programmatic reasons - but they really haven't taken any
fundamental decisions about what U.S. policy on Egypt should be in
the long-term," Katulis said.
U.S. officials hope that the Apaches will help Egypt fight militant
groups based in Egypt's Sinai peninsula, including Ansar Bayt
al-Maqdis. Egyptian officials say the groups have killed about 500
people in recent months.
General Abdel Fattah al-Sisi, who ousted Mursi and is widely
expected to win next week's presidential vote, said in an interview
with Reuters last week that the West risked letting militant groups
in places like Egypt, Libya and Syria metastasize if it didn't act
decisively to help fight them.
Last month, the White House announced it would designate Ansar Bayt
al-Maqdis as a terrorist group, another move welcomed by Egypt's
military-backed government.
Robert Springborg, an Egypt expert at the department of war studies
at King's College in London, said that a U.S. focus on
counterterrorism could suit Sisi.
He had signaled since becoming defense minister in 2012 that Egypt
needed weaponry suited for fighting insurgents rather than high-end
arms like jets, which are more useful in a ground war and which had
been sought for decades by Mubarak.
State Department officials, including Secretary of State Kerry,
appear to view U.S. ties to Egypt as increasingly important given
the turmoil throughout the region, particularly in Syria, Iraq and
Libya, Schenker said.
But Egypt's fierce crackdown on dissent is still impeding closer
ties. "The White House is looking at this saying there are
legitimate human rights concerns," Schenker said.
Where U.S. policy on Egypt is heading is "still being written," a
senior U.S. military official said.
Even recently restored aid could ultimately be held up in Congress.
On April 29, influential Senator Patrick Leahy said he would not
approve the aid, denouncing death sentences that Egyptian courts
have handed down for hundreds of Muslim Brotherhood supporters or
other government opponents.
(Editing by Jason Szep, Peter Henderson and David Storey)
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