A U.S. decision to curtail military and economic aid to Egypt to promote democracy may ultimately backfire, pushing Cairo to seek assistance elsewhere and giving Washington less leverage to stabilize a country in the heart of the Middle East.

Washington faces a dilemma in dealing with its major regional ally: Egypt controls the Suez Canal and has a peace treaty with neighboring Israel but its army overthrew the first freely elected president, Islamist Mohamed Morsi, in July.

The United States said on Wednesday it would withhold deliveries of tanks, fighter aircraft, helicopters and missiles to Cairo as well as $260 million in cash aid to push the army-backed government to steer the nation towards democracy.

Egypt’s government, the second largest recipient of U.S. aid after Israel, said it would not bow to American pressure. The country’s military, which has been leading the crackdown against Morsi’s Muslim Brotherhood, can afford to be even more defiant.

Hundreds of Brotherhood members were killed and about 2,000 Islamist activists and Brotherhood leaders, including Mursi, were arrested.

Army chief Abdel Fatah al-Sisi has emerged as the most popular public figure in Egypt, and he is well aware that many Egyptians have both turned sharply against the Brotherhood and bitterly concluded that Washington supports the movement.

At the same time, many Brotherhood members believe the Obama administration was behind what it calls a military coup.

With its credibility in question, Washington has little chance of getting the two sides to compromise and take part in a democratic, inclusive political process.

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