The United States said Tuesday it is moving toward a resolution "very soon" with Egypt over a crackdown on US and other pro-democracy groups that has imperiled the decades-old alliance.
Secretary of State Hillary Clinton delivered the upbeat assessment two days after an Egyptian court began trying 43 workers for non-governmental organizations (NGOs) on charges of receiving illegal foreign funds.
Clinton and US lawmakers have warned the military authorities who have ruled Egypt since president Hosni Mubarak's overthrow a year ago that $1.5 billion in annual aid could be put in jeopardy if the case were not resolved.
"We are engaged in very intensive discussions with the Egyptian government about finding a solution," Clinton told a Senate committee hearing on the State Department's proposed budget.
"We've had a lot of very tough conversations and I think we are moving toward a resolution," the chief US diplomat said.
"But I don't want to discuss it in great detail because it's important that they know that we are continuing to push them but that we don't necessarily put it out into the public arena yet," she added.
When Republican Senator Lindsey Graham pressed for information on the case, Clinton said: "I don't want to go any further than I have in saying that we're hoping to resolve this very soon."
Most of the 43 defendants, including 19 Americans, did not show up in court when the trial opened on Sunday. An AFP correspondent said the 14 defendants who did appear denied they had committed crimes.
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The trial, which was adjourned until April, follows raids in December on the International Republican Institute, the National Democratic Institute, the International Center for Journalists and Freedom House -- all from the United States -- as well as on Egyptian and other groups.
US officials immediately demanded the return of seized computers and other property and called on the Egyptian authorities to allow the groups to resume normal activities.
Several of the American suspects later sought refuge in their embassy in Cairo, including Sam LaHood, son of US Secretary of Transportation Ray LaHood and head of the Egyptian chapter of the IRI.
When Graham asked Clinton if she believed the cases against the NGO workers to be legitimate, she replied: "No, I do not."
Some of the groups had helped train activists and candidates to campaign in parliamentary elections that opened last November, Egypt's freest vote in decades.
The charges, which US legislators have derided as political, came as the military faced growing dissent from activists who demand the ruling generals immediately cede power to a civilian government.
In response, the generals have accused their opponents of seeking to destabilize Egypt, which was rocked by an 18-day pro-democracy uprising that overthrew Mubarak, a former military officer, in February last year.
Authorities have played on abundant suspicion in the country of foreign plots, seizing on the case as an example of intervention in the Arab world's most populous country.
After it became the first Arab country to sign a peace treaty with Israel in 1979, Egypt became the anchor of US diplomacy in the Middle East.