The US embassy in Cairo issued a strongly-worded defence of its aid to Egypt as prosecutors probed foreign funding of civil society groups amid signs of tensions between Washington and Egypt's ruling generals.
The State Security prosecution, which used to coordinate with the State Security Investigations Service that was disbanded for rights abuses, is investigating complaints that NGOs were receiving illegal funding from abroad.
The probe, which the sources said was focusing on US funding, came as Washington said it had raised concerns with the military about "anti-Americanism" in Egypt.
The US embassy said on Friday that USAID director Jim Bever had left his post in Egypt, but denied his departure was due to "anti-American sentiment."
A cabinet source told AFP that the investigation was first launched last month by the ministry of international cooperation.
The decision came after the newly appointed US ambassador to Cairo, Anne Patterson, said the US distributed $40 million to NGOs since a January revolt that toppled president Hosni Mubarak.
"USAID has contributed to Egyptian development needs for more than 30 years, and US taxpayers have over this time financed nearly $30 billion in assistance programs," the embassy statement said.
"We are proud of this record, and we are proud of the patriotic Egyptian partners we worked with every step of the way," it said.
"And yes, the United States has always included in its assistance programs funding to strengthen and expand Egypt's civil society, including those brave Egyptians struggling for democracy and human rights," it said.
The embassy said its aid funding complied with "the strictest standards of transparency and accountability" and did not fund political groups.
The initial probe coincided with a spike in tensions between the military and activists who want a speedier transition to civilian rule.
The military has described the activists as foreign funded, an accusation that resonated in a country where there is abundant suspicion of foreign plots.
The military enjoys close ties with Washington and receives more than $1 billion in US aid annually, but it has blamed foreigners for plotting unrest and directing activists against the military.
A rights activist has described the probe as a "targeted crackdown."
"This is a very serious escalation after several weeks of criticism of NGOs receiving foreign funding," said Heba Morayef, a Cairo-based researcher with the international rights group Human Rights Watch.
The probe will target NGOs using a law created by the ousted Mubarak's government, which allows foreign funding only for registered NGOs, which must notify authorities when they receive the money.
"The media campaign that paved the way for announcing this investigation is very similar to how human rights organisations were targeted under Mubarak," said Hossam Bahgat, director of the Egyptian Initiative for Personal Rights.
"The timing suggests that the sole purpose of this move is (the ruling military council's) increasing intolerence of criticism of its conduct," he said.
Morayef said the Mubarak-era law restricted the work of NGOs, which had to receive state security permission to be granted legal status.
"It is targeting NGOs that were blocked from registering by State Security," she said.
USAID on Friday decided to halt humanitarian assistance to the Gaza Strip over alleged meddling by the radical Palestinian group Hamas, a US official told AFP.
