Egypt's PM says US threats to cut aid won't work

Cairo: Egypt refused to back down on Wednesday in a dispute with the US over Cairo's crackdown on nonprofit groups despite Washington's threats to cut aid, while the military deployed troops to the nation's streets after a surge in violence and protests against its rule.

Egypt's official MENA news agency said the army was deploying more troops to reinforce the police, restore security and state "prestige." The move comes in the wake of a deadly soccer riot last week that sparked days of clashes between the police and protesters. At least 89 people were killed in a week of violence.

The deployment appeared to be a show of force by the military in response to a surge in criticism of its handling of the country's transition to democracy and rising calls for the ruling generals to step down. There are calls for a general strike on February 11 that have been gaining traction.

Egypt's military rulers are also facing a deepening dispute with the United States over Cairo's campaign against foreign-funded pro-democracy and rights groups, which began late last year with raid by security forces on the organizations' offices. Authorities allege there is a foreign conspiracy against Egypt to explain the widening protests against the military's performance.

On Sunday, Egyptian investigative judges referred 16 Americans and 27 others to trial on accusations they illegally used foreign funds to foment unrest in the country.

That immediately drew a sharp rebuke from Washington, with Secretary of State Hillary Rodham Clinton warning that failure to resolve the dispute may lead to the loss of some $1.5 billion in aid to Egypt. Some US legislators even said every aspect of the relationship with Egypt must be examined following the crackdown.

State Department spokeswoman Victoria Nuland called on Egypt to release the Americans, saying the 16 "have not done anything wrong." Egyptian authorities put the number of Americans referred to trial at 19, but Nuland on Tuesday said there are 16 Americans in the case.

With tensions rising, the Chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, is to travel to Egypt this week for talks with military ruler Field Marshal Hussein Tantawi. Dempsey's spokesman, Col. Dave Lapan, said Wednesday the trip has long been planned, but that the nonprofit spat will come up if it hasn't been resolved. He said Dempsey would talk with Egypt's leaders about "choices and consequences," but declined to elaborate.

Despite the warnings from Washington, Egypt's military-backed Prime Minister Kamal el-Ganzouri struck a defiant tone Wednesday, telling reporters he was "saddened" by the pressure Egypt was facing but insisting authorities "can't back down or won't change course because of some aid."

"Egypt used its legal right to face some violations by civil groups," he said. "The lofty judiciary moved and discussed and investigated the case. ... The West then turned against us because Egypt exercised its rights."

El-Ganzouri also charged that aid pledged by Arab states has also stalled since the dispute began. He said he met in early December with Arab ambassadors "who promised that Egypt will receive a lot of money," but two months later "none of these promises have come through."

He hinted that the US and Arab allies are withholding aid money because Egypt has adopted more independent policies since the uprising that ousted President Hosni Mubarak in February.

Egypt's net international reserves were down 50 per cent year-on-year by the end of December as the country's economy is reeling from the overall effect of the uprising and the turmoil that followed. The government is discussing with the International Monetary Fund a $3.2 billion loan.

Addressing the rising calls for the military to step down, el-Ganzouri said the generals will not leave office before the end of June as currently planned. He warned against calls for the speedy end of military rule, recalling the fall of the Iraqi army after the US invasion in 2003. He said the Iraqi army's demise pushed the country down the path to civil war.

In an attempt to rally public support, el-Ganzouri appealed to nationalist sentiment and urged Egyptians to unite in the of face tough times ahead. He argued that the current conditions in Egypt are worse than after the country's crushing military defeat in 1967 when Israel captured the Sinai Peninsula, the West Bank, the Golan Heights, the Gaza Strip and east Jerusalem.

"What we are seeing now is worse than after the 1967 defeat, which was a military one," he said. "What is happening is a call to defeat the whole people, not only a military defeat. If we unite, we will get through this."

El-Ganzouri also warned that Egypt was the backbone of the Middle East, a region in flux at the moment, and that "if it (Egypt) falls, the whole region will follow."

"Neither the West, nor the Arab brothers are aware of this," he said.

Local civil groups say the campaign on foreign-funded nonprofit groups is in preparation for a harsh crackdown on local rights groups who have been documenting and lobbying against the military rulers since they took office last year.

Hafez Abou Saada, a veteran Egyptian human rights activist, said Cairo's clash with the US over the groups "is incomprehensible and unjustified and goes to show that the case against the civil groups is not a legal but is a political one."

He said el-Ganzouri's comments are "an attempt to rally a domestic front behind the government and create an enemy."

The military rulers charge that the foreign groups fund and support anti-government protests. The military claims that "foreign hands" are behind the opposition to their rule. They frequently depict the protesters as receiving funds from abroad in a plot to destabilize the country.

On Wednesday, Egyptian judges said the evidence collected in the case against 16 Americans referred to court for their alleged involvement in banned political activity through nonprofit groups include maps, cash and videos taken of churches and military facilities. Among the Americans referred to court is the son of US Transportation Secretary Ray LaHood.

Ashraf el-Ashmawi, one of the judges investigating the case, said authorities are investigating other groups.

In reference to the already named groups, he said: "Their activities have nothing to do with human rights."