By Elise Labott
International diplomacy hit a dead end Wednesday when the interim Egyptian government broke off talks to defuse the political crisis.
Egypt declared efforts to broker an agreement between the Muslim Brotherhood and the military-backed government a failure, putting an end to an intense effort by the United States, the European Union and other countries to end the stalemate sparked by the military's ouster of President Mohammed Morsy.
"These efforts have not achieved the hoped for results," the Egyptian presidency said in a statement on the end of the mediation. The statement placed blame on the Muslim Brotherhood.
The president thanked diplomats for mediation efforts but didn't take kindly to warnings from key U.S. senators in the region.
A top government spokesman berated Republican John McCain in the major Egyptian paper, Al Ahrah, accusing him of “falsifying the facts” and saying his “foolish statements are unacceptable.”
The international diplomacy did temporarily avert further deadly violence expected when the government ordered an end to sit-ins by Morsy supporters in two Cairo squares.
But on Wednesday, Egypt's prime minster said on state TV the decision to clear those actions was “irreversible,” suggesting a use of force could be imminent.
"I am skeptical we can avoid violence," one senior Arab diplomat said, noting that positions are hardening on both sides.
What leverage the United States has to impact positive change in Egypt will be the topic of discussion in the coming days.
McCain and his Republican colleague, Lindsey Graham, waded into the standoff in Cairo a day earlier, warning Egypt the United States would cut off aid if the military-appointed government did not fail to reinstitute democracy and release prisoners, including Morsy and other Brotherhood leaders.
The lawmakers, who visited Egypt at the behest of President Barack Obama have said the United States should call Morsy's ouster a "coup," a determination the administration has thus far avoided.
The United States is carefully weighing its next steps.
Deputy Secretary of State William Burns is due back in Washington after several days of meetings in Egypt. U.S. officials say they will continue to push for an inclusive political process, but recognize the climate is not encouraging.
"While further violent confrontations have thus far been avoided, we remain concerned and troubled that government and opposition leaders have not yet found a way to break a dangerous stalemate and agree to implement tangible confidence building measures," Secretary of State John Kerry and EU foreign policy chief Catherine Ashton said in a joint statement.
"This remains a very fragile situation, which holds not only the risk of more bloodshed and polarization in Egypt, but also impedes the economic recovery which is so essential for Egypt's successful transition," they added.
Beyond dealing with the near-term issues of protestors in Cairo and the need for Egypt to move toward elections, Jon Alterman, director of the Middle East Program at the Center for Strategic & International Studies, says U.S. discussions of its future Egypt policy should include a long overdue examination of its goals and interests with Cairo.
"We need to have a discussion about the costs and benefits of different relationships with the Egyptians and the Egyptians need to have the same about their relationship with us," Alterman says. "This is a relationship that each side has taken for granted for decades and it has created a sense on both sides that each side is unappreciated."
Alterman notes the United States and Egypt have enjoyed a broad and deep relationship based on a strategic alignment on a whole range of regional issues. But the current Egyptian government, he says, feels the relationship has been one of dependency and undermines Egyptian interests and Egyptian sovereignty.
"Still, it's a relationship that Egyptian governments have benefited from and agreed to," he says. "Egypt has many options in the world but there is no country or collection of countries who can provide it with what the U.S. has been provided for decades."
For the United States, Alterman says, the relationship far transcends the military contacts and maintaining the peace treaty with Israel. Intelligence cooperation, access to the Suez canal and business for American companies are all benefits the U.S. needs to consider when it examines its ties with Cairo.
"If you want a different relationship, you have to articulate what that looks like, and accept you are going to have to give up some things to get other things," he says. "But this is not the government of Egypt who will make these decisions about their relationship with the US. We need to recognize that what is happening is part of their unfolding politics."