Amid growing anti-US protests, Egypt's new Islamist President Mohamed Morsi is walking a delicate tightrope, keen not to be seen as too pro-American by his people while keeping billions of dollars flowing from the West, analysts say.
Implicitly acknowledging the dilemma, US President Barack Obama said late Wednesday that ties with the new Egypt -- once a staunch US friend -- were a "work in progress" and it could neither be considered an ally nor an enemy.
Washington, which pumps $1.3 billion in military aid to Cairo every year and is reported to be weighing a deal to relieve $1 billion worth of debt, is keeping a watchful eye on Egypt's new rulers.
A former member of the Muslim Brotherhood, Morsi became Egypt's first democratically elected president in June after the ousting of the nation's autocratic leader Hosni Mubarak, a long-time US supporter, in 2011.
"The administration is giving him a lot of space to figure out where he wants to be and where he wants Egypt to be," former US ambassador to Cairo, Daniel Kurtzer, told AFP.
"Mubarak, when he was president, thrived on the idea that he was a strategic ally, I think Morsi would see that kind of embrace as constraining him. I think the administration is sensitive to that."
But Kurtzer argued there needed to be "a show of determination" by the Egyptian leader that demonstrations, which are part of a democratic society, would not be allowed to turn violent and US embassies would be protected.
Many Egyptians also remain wary of Morsi, who was very narrowly elected, and there were vocal protests during a visit in July by US Secretary of State Hillary Clinton by crowds alleging their revolution had been "stolen."
International capitals are also watching to see what kind of democracy will evolve under the new leadership.
"There's no question that his colleagues within the Brotherhood have certain expectations with respect to where Morsi will lead the country in terms of religious legislation and religious practice," Kurtzer said.
"How far he goes, and what he does, and what choices he makes will largely determine the relationship he has not only with the United States but with the West in general."
On Thursday, EU leaders offered Egypt more than a billion euros in aid and better trade as Morsi arrived in Brussels on his first visit to Europe pledging to support democratic values and protect foreigners.
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Morsi also appealed for calm after two days of protests at the US embassy in Cairo triggered by an amateur anti-Islam film made in the United States, and condemned an attack on a US mission in Libya in which the American ambassador and three other diplomatic staff were killed.
But there has been concern that he failed to immediately apologize after protestors Tuesday scaled the Cairo building's walls and tore down the US flag.
"We Egyptians reject any kind of assault or insult against our prophet. I condemn and oppose all who... insult our prophet," Morsi said Thursday.
"(But) it is our duty to protect our guests and visitors from abroad," he added on state television.
Morsi is "trying to walk a very difficult line in trying to re-position himself, that he's not Mubarak, he's not seen to be too pro-American," said Joshua Landis, director of the Center of Middle East Studies at the University of Oklahoma.
"Yet at the same time he needs to maintain the peace with Israel and to continue the lavish military aid that America showers on Egypt," he told AFP.
Obama acknowledged the United States expected Cairo to be "responsive to our insistence that our embassy is protected, our personnel is protected.
"And if they take actions that indicate they're not taking those responsibilities, as all other countries do where we have embassies, I think that's going to be a real big problem."
Armored vehicles were deployed around the US embassy in Cairo on Thursday, an AFP correspondent reported.
But Emile Hokayem, the Middle East analyst for the London-based International Institute for Strategic Studies (IISS), told reporters that Morsi had taken "forever" to make a statement about the attack.
"The attacks were tragic, but in a more strategic sense what matters more is the response from the Libyan and Egyptian governments and publics to what happened and this is going to be the real test," he said.
"This is a big test in terms of their international credibility."