U.S. Wary About 'Unclear' Situation in Egypt

The United States is closely following the drama unfolding in Egypt unsure of President Mohamed Morsi's plans as thousands protested in Cairo against his power grab, U.S. officials said Tuesday.

The situation was evolving, State Department spokeswoman Victoria Nuland said, seeking to downplay fears that Islamist Morsi, elected after long-time leader Hosni Mubarak was toppled in 2011, was morphing into an autocrat.

Morsi unveiled a decree last week allowing him to "issue any decision or law that is final and not subject to appeal" raising fears he is trying to assume sweeping powers to rule just as Egypt seeks to throw off Mubarak's shadow.

But Nuland highlighted that Morsi had held talks with the judiciary and other Egyptian leaders since issuing what he called a "temporary" decree.

"I think we don't yet know what the outcome of those are going to be. But that's a far cry from an autocrat just saying, my way or the highway," she said.

She warned however last week that "one of the aspirations of the revolution was to ensure that power would not be overly concentrated in the hands of any one person or institution."

And despite her carefully worded statement on Tuesday, the U.Se. embassy in Cairo seemed to suggest that Egypt was indeed on the path to a new dictatorship.

"The Egyptian people made clear in the January 25th revolution that they have had enough of dictatorship," the embassy tweeted in a message on its Twitter account.

Spokesman for the Near Eastern Affairs bureau, Edgar Vasquez, denied that there were mixed messages coming from the State Department.

"Our position is and has been that one of the aspirations of the Egyptian revolution was to ensure that power is not overly concentrated in the hands of any one person or institution," he said in a statement sent to Agence France Presse.

"That is essentially what the tweet is saying in tweet speak."

The decree has put Morsi on a collision course with the judiciary and consolidated the divided opposition which alleged he was taking on dictatorial powers. It also raises concerns the Islamists will be deeper ensconced in power.

It has also placed Washington in a quandary as it seeks to take the measure of the new leader, only days after praising him for brokering a ceasefire in a bitter brief war between Israel and Hamas leaders in the Gaza Strip.

"The situation remains unclear," Nuland told journalists, adding "we are continuing to consult with various parties to understand how they appreciate the situation."

White House spokesman Jay Carney added the "current constitutional impasse is an internal Egyptian situation that can only be resolved by the Egyptian people, through peaceful democratic dialogue."

Egypt was working through a very "murky legal period," Nuland said, calling for "national unity around a way forward."

She hinted that if Egypt appeared to be veering off the democratic course, some of the vast amounts of international aid to the country could be at stake.

"We want to see Egypt continuing on a reform path to ensure that any money forthcoming from the IMF truly supports a stabilization and a revitalization of a dynamic economy based on market principles," Nuland said.

The International Monetary Fund on Tuesday said Egypt can still get its $4.8 billion loan agreed last week despite the turmoil as long as there is "no major change" in its reform commitments.

"The staff-level agreement on financial support from the IMF is based on the economic and social policies that the government plans to implement under its program," IMF spokeswoman Wafa Amr said in a statement.