President Barack Obama condemned the deadly violence in Egypt and said the U.S. is canceling plans to hold joint military exercises with the country next month. Watch the full statement.

The deadly fight in Egypt's streets has led U.S. officials to question whether America's long-standing ally can remain a fundamentally stable state.


Worries that Egypt is headed to an extended armed insurrection, and that the U.S. has little power to stop it, help explain President Barack Obama's cautious response to this week's bloody crackdown by Egyptian security forces on Muslim Brotherhood supporters, U.S. officials say. In response to violence that has left hundreds dead on the streets of Cairo, Mr. Obama on Thursday canceled a coming U.S.-Egyptian military exercise to show displeasure at the actions of the country's military leaders—but stopped short of cutting off aid more broadly.

U.S. officials describe a balancing act in which the president is trying to register displeasure with the crackdown while also keeping channels open to Egypt's military leaders and avoiding the risk of encouraging protesters to think they can prevail with violent tactics.

Egyptians mourn over the bodies of their relatives in the Iman Mosque in Cairo on Thursday. Associated Press

The conventional wisdom—shared by both the U.S. and its allies in Israel—has long been that Egypt has a relatively cohesive society, free of the stark sectarian divisions that have fueled so much unrest in countries such as Syria, Lebanon and Iraq. While the U.S. intelligence community saw trouble brewing in Egypt for months, analysts now are contemplating the once-unthinkable prospect of a long-term period of violence between secular and Islamist groups.

"There is a real possibility of civil war," said one senior U.S. official briefed on the intelligence. "There is a dangerous possibility Egypt goes the way of Syria."

In his remarks from outside the Martha's Vineyard home where he is vacationing, Mr. Obama condemned the deadly violence in Egypt and called on its interim government to lift a state of emergency. He also tried to nudge the military and the Brotherhood toward the peaceful beginnings of a broad government. "America will work with all those in Egypt," he said, insisting "all parties need to have a voice in Egypt's future."

Relatives attend the funeral of Egyptian policemen who were killed during clashes. European Pressphoto Agency

In response to Mr. Obama's comments, Egypt's presidency released a statement late Thursday expressing its "appreciation" for the president's concern while cautioning that understanding "the real facts" were necessary. "The [Egyptian] Presidency fears that statements that do not depend on the truth of matters may lead to strengthening the armed violent groups and encouraging them in their path against stability," the statement read.

Among U.S. officials, the fear is that Egypt could head in a darker direction. U.S. officials and regional diplomats say the nightmare scenario would be a civil war in Egypt that creates a crescent-shaped arc of instability from Syria and Lebanon to Iraq, Egypt and Libya. Israeli officials have told their American counterparts that, if Egypt succumbs to violence, an already fragile Jordan could be next, jeopardizing the Jewish state's last stable border and its buffer zone with Iran.

Mr. Obama on Thursday canceled a coming U.S.-Egyptian military exercise. Reuters

While U.S. intelligence officials don't expect the Muslim Brotherhood to mount an organized insurgency in Egypt, radicals within the group could go underground and launch attacks. Some radical Islamists in Egypt who fought in Iraq during the U.S. occupation have returned home, where they could wreak havoc, officials say.

Moreover, a stockpile of arms lies in neighboring Libya, a country in which the security situation is spiraling downward in similar fashion. That impedes the ability of the Libyan government to lock down the arsenal accumulated by the late Libyan leader Moammar Gadhafi.

U.S. officials worry eastern Libya could serve as a springboard for insurgents moving across the border into Egypt. The Egyptian military has appealed to the U.S. for months to help curb the flow of weapons they feared were moving across the Libyan border and on to Islamic militants operating on the other side of Egypt, in the Sinai Peninsula.

Even if an insurgency breaks out, though, many U.S. officials think the Egyptian army could contain it. There are no signs of a split within the military, and intelligence agencies don't think the Muslim Brotherhood's supporters have a large quantity of arms.

Still, one senior administration official cautioned Thursday: "We are concerned that if they continue down a path of crackdown there could be an escalating cycle of violence…you could have a more unstable situation over time if there's not a political process established."

The Obama administration has been carefully—critics say, timidly—calibrating its response. Administration officials and those from allied nations in the region both argue that cutting off all aid to Egypt could make a dangerous situation even worse, prompting the country's generals to sever ties with the U.S. and emboldening Muslim Brotherhood supporters to step up protests.

So Mr. Obama, in a statement delivered Thursday during his vacation, tried to balance his impulse to keep open lines to the Egyptian government with the mounting pressure at home to take stronger action against it, U.S. officials say.

He urged Egypt's military leaders to end the bloodshed while also cautioning that he wasn't trying to encourage the protesters. "We don't take sides with any particular party or political figure," he said.

In a nod to those in Congress who want to do more to freeze some $1.5 billion in annual U.S. aid to Egypt, most of which goes to the military, he also cautioned: "While we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back."

The administration is employing what amounts to a good-cop, bad-cop approach to try to pull Egypt's generals back from the brink. While the White House has made clear privately and publicly that it doesn't want to cut off Egypt's aid, it has also warned the generals that a growing number of lawmakers may do just that if the violent crackdowns continue.

"Congress has a very important voice here," a senior administration official said. "We're going to have to have a dialogue with Congress when they come back in town."

The violent course of events in Egypt shows the extent to which the Obama administration misjudged the depth of divisions within Egyptian society and the potential for a sustained violent showdown between Islamists and non-Islamists, officials and diplomats say.

In April, one senior American official called the country a "relative island of stability" in the region—despite signs of a coming breakdown between the military and President Mohammed Morsi, whose Muslim Brotherhood-backed government failed to heed U.S. advice to reach out to its opponents. At the same time, the country's military leaders didn't listen to American appeals to give Mr. Morsi more time.

Events seem to be moving beyond U.S. control or influence, much as they have in the civil war in Syria. There isn't yet any area in Egypt where insurgents could operate out of the military's reach, as there is in Syria, though that is why the Libyan border in the west and the thinly populated Sinai Peninsula in the east are worrisome.

Those concerns have led to what Western officials have described as unprecedented cooperation between Israeli and Egyptian security services. An Israeli drone strike last week in Egyptian territory in the Sinai was carried out after consultations between Israeli and Egyptian security chiefs.

—Matt Bradley contributed to this article.

Write to Adam Entous at, Carol E. Lee at and Julian E. Barnes at