Kerry releases $250 million in aid to Egypt

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CAIRO -- Secretary of State John Kerry released $250 million in badly needed economic assistance for Egypt on Sunday, telling the country's divided political classes that they must make economic and political overhauls to qualify for additional support.

"The United States can and wants to do more," Mr. Kerry said in a statement released to reporters shortly after his more than two-hour session with Egyptian President Mohammed Morsi. About an hour of their time was spent one on one, in what U.S. officials said would be blunt discussions of Egypt's tanking economy and political deadlock.

"When Egypt takes the difficult steps to strengthen its economy and build political unity and justice, we will work with our Congress at home on additional support," Mr. Kerry said. "These steps will also unlock much needed private-sector investment and broader financial assistance."

The State Department said Mr. Kerry's meeting with the Islamist leader also covered the crisis in Syria and prospects for Israeli-Palestinian peace. The chaotic domestic situation in Egypt has overtaken the traditional American agenda with Egypt, long its most-valued Arab ally and the linchpin of Arab-Israeli peace.

International investment and the revival of tourism, long the mainstay of the Egyptian economy, depend on a truce between Mr. Morsi's Muslim Brotherhood and secular moderates, and a reduction in street violence that has scared off foreigners.

That violence manifested itself Sunday in the Suez Canal port city of Port Said, where the military intervened in clashes between thousands of protesters and police, the latest in a cycle of violence that killed two security members and two civilians, and which continues to rock Egypt two years after the uprising that ousted Hosni Mubarak.

Also on Sunday, a court ruled that Mubarak will face a new trial next month on charges related to the killings of hundreds of protesters during the revolution that forced him from power.

Around 5,000 protesters threw rocks and firebombs at police in Port Said late Sunday, the scene of a civil strike now in its second week. Riot police responded with tear gas and bird shot in street battles that lasted for hours.

Mr. Kerry's visit, part of his first overseas trip as secretary of state, also was the first by a top American diplomat since Egypt approved a new constitution that is at the heart of the current protests and political deadlock. Mr. Morsi's political opponents object both to the Islamic focus of the document and to what they call a ramrod approach to its passage.

Mr. Morsi's Freedom and Justice Party called Mr. Kerry's visit a good-faith effort to ease the political impasse between Islamists and the secular opposition.

Although the United States has voiced concerns over the Egyptian constitution approved last year, Mr. Kerry had no public criticism of the document on this visit. The constitution replicates some of the centralized power structure built by Mubarak, whose toppling came to symbolize the 2011 Arab Spring revolutions.

Mr. Kerry's statement noted that during his two-day visit, he had met with political leaders, business leaders and representatives of non-governmental organizations, who "shared their deep concern about the political course of their country, the need to strengthen human rights protections, justice and the rule of law, and their fundamental anxiety about the economic future of Egypt."

Amid questioning from Congress about Egypt's political instability and the U.S. budget crunch, some $450 million in U.S. aid to Egypt has been frozen on Capitol Hill. In addition, the International Monetary Fund has held off on loans and debt relief worth more than $4 billion.


Associated Press contributed.


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