A protester throws a tear gas canister back at riot police during clashes near Tahrir Square, in Cairo, Sunday, Jan. 27, 2013. Clashes continued for the fourth successive day between protesters and police near Tahrir square, birthplace of the 2011 uprising. Police used tear gas, while the protesters pelted them with rocks. (AP Photo/Khalil Hamra)
A protester throws a tear gas canister back at riot police during clashes near Tahrir Square, in Cairo, Sunday, Jan. 27, 2013. Clashes continued for the fourth successive day between protesters and police near Tahrir square, birthplace of the 2011 uprising. Police used tear gas, while the protesters pelted them with rocks. (AP Photo/Khalil Hamra)
People carry the coffin of a man killed during a mass funeral in Port Said, Egypt, Sunday, Jan. 27, 2013. Tens of thousands of mourners poured into the streets of Port Said on Sunday for a funeral for most of the 37 people killed in rioting a day earlier, chanting slogans against Islamist President Mohammed Morsi. (AP Photo)
WASHINGTON (AP) ? President Barack Obama begins his second term straining to maintain a good relationship with Egypt, an important U.S. ally whose president is a conservative Islamist walking a fine line between acting as a moderate peace broker and keeping his Muslim Brotherhood party happy with anti-American rhetoric.
The White House last summer had hoped to smooth over some of the traditional tensions between Washington and the Brotherhood, a party rooted in opposition to Israel and the U.S., when Egypt overthrew dictator Hosni Mubarak and picked Mohammed Morsi as its first democratically elected leader.
But a spate of recent steps ? from Brotherhood-led attacks on protesters, to vague protestations of women's freedoms in the nation's new constitution, to revelations of old comments by Morsi referring to Jews as "bloodsuckers" and "pigs" ? have raised alarm among senior U.S. officials and threatens $1 billion in American aid to Egypt.
Moreover, political unrest gripping Egypt ? spurred, in part, by public frustration with Morsi and the Muslim Brotherhood ? has spooked international lenders and delayed billions of dollars more. Tensions peaked this weekend with clashes in three Suez Canal provinces that left more than 50 people dead, forcing Morsi to declare a monthlong state of emergency and urging his liberal and secular political opponents to join a national dialogue, starting Monday, to ease the crisis.
The Morsi-led government is "a new administration and they're obviously having growing pains," said a senior Obama administration official who agreed to speak on condition of anonymity so she could discuss White House policy. She said the White House is increasingly concerned about the direction the Brotherhood is taking Egypt.
Yet the White House has little interest in picking a fight with the Muslim Brotherhood, which has grown in size and stature across the region since the Arab Spring revolts. The Brotherhood and similar Islamist movements are regarded warily by monarchies in Jordan, Kuwait, Saudi Arabia, the United Arab Emirates and Morocco. Its members are part of the opposition coalition seeking to oust Syrian President Bashar Assad. It has small followings in Qatar, Algeria, and a like-minded ? although not officially affiliated ? ally in Tunisia.
Though the Brotherhood was founded in Egypt, its influence and affiliates have spread across the Mideast and into North Africa ? where two recent terrorist attacks and a French assault on Islamist militants in Mali have presented Obama with a new front in the battle against extremism for his second term.
Since the Tahrir Square revolution two years ago, Washington has tried to help Egypt build a democratic state without appearing to tread on its sovereignty. Morsi won election last June with 51 percent of Egypt's vote, and has since offered words of moderation, brokered a cease-fire between Israelis and Palestinians in Gaza and bore down on terrorist dens in the Sinai Peninsula.
But Morsi's anti-Semitic comments, made in separate speeches in 2010 but which surfaced this month on Egyptian TV, also accused Obama of being a liar. They shocked U.S. officials who sprang to condemn them as counter-productive to American-supported peace efforts in the Mideast. But they surprised few people in Egypt, who have heard Brotherhood officials make similar statements for years.
Morsi initially struggled to respond to the U.S. backlash from the comments. His office issued a statement committing to uphold religious freedoms and tolerance, and condemning violence.
"The president strongly believes that we must respect and indeed celebrate our common humanity, and does not accept or condone derogatory statements regarding any religious or ethnic group," the statement said, without addressing the fact that Morsi himself made those comments.
The statement, however, did little to soothe U.S. lawmakers ? Democrats and Republicans alike ? who have balked at approving $1 billion in aid to Egypt that Obama promised in 2011 to help the new government settle an economic crisis that has drained the country's central bank and devalued the local currency in the revolution's aftermath.
"How would the American people feel about cutting money to education programs here and giving money to a government that is anti-Semitic?" Rep. Frank Wolf, R-Va., a member of the House Appropriations subcommittee that oversees funding to foreign governments, said.
"I don't think the administration has any right to say they are going to grant this foreign aid because I think this Congress may very well condition it," Wolf said. "I think there are a lot of questions, and I don't think it's a given."
Part of the proposed $1 billion aid package depends on International Monetary Fund approval of its own $4.8 billion loan to Egypt. But that loan has stalled for months because of Egypt's instability.
Despite its misgivings about Morsi, the White House still is pushing Congress for the funding, acknowledging that Egypt's downfall all but certainly would roil the already turbulent Mideast and North Africa.
"It's not in our interest to have an economic collapse in Egypt," said the senior Obama administration official.
The Brotherhood describes itself as a non-violent social organization dedicated to instilling Islamic values in the society. In Egypt, where it formed, the group was repressed by former regimes for decades and has struggled with adjusting to its new role leading the government. Its members, fearing a coup, are widely blamed with attacking anti-Morsi protesters outside the presidential palace in Cairo last month in clashes that left at least 10 people dead.
"What they missed was the fact that they are a governing party now, and to be getting into street battles when you also have commanding presence in the Egyptian state shows inexperience and panic," said Nathan Brown, a professor at George Washington University who has been researching Islamic movements for nearly a decade. "This is the kind of group that will be a pain to deal with for the United States, but it's not al-Qaida; it's not a security threat."
He added: "The biggest fear on the part of the (Obama) administration is a political breakdown in Egypt. They are worried that a collapse in the Egyptian state would be destabilizing on the region, and might allow the flow of arms and fighters among more radical movements in the region ? especially in trouble spots like Sinai and Gaza."
Obama administration officials said Morsi's promises to abide by Egypt's 1979 peace treaty with Israel, and continued security cooperation with Israel over the volatile Sinai Peninsula shows his willingness to be a reasonable partner. Morsi's work in November to broker a cease-fire between Israel and Gaza's Hamas rules was "a good first step," the senior Obama administration official said.
But Washington remains wary of Morsi and the Muslim Brotherhood, "who come from a very conservative viewpoint with issues that are very important to America," said Sen. Kirsten Gillibrand, D-N.Y.
Gillibrand was part of a delegation of U.S. lawmakers who met with Morsi in Cairo this month shortly after his 2010 statements surfaced. She stopped short of saying Morsi appeared chastened but described him as mindful of "how important America is to the viability of his presidency and the economy."
She said lawmakers want to see what actions he takes, "and we want to see if his words match those deeds and actions," Gillibrand said.
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Follow Lara Jakes on Twitter at https://twitter.com/larajakesAP
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