And officials said the administration is concerned about taking any step that endangers American diplomatic personnel on the ground.
To respond to the escalating death toll and security crackdown, the administration is considering suspending about $250 million in annual U.S. economic aid for Egypt, officials said. Congressional notification could arrive in the next week, said the officials, who weren't authorized to speak publicly on the matter and demanded anonymity.
However, officials said Obama and his national security team are still reluctant to issue any similar, blanket edict on the $1.3 billion in yearly military assistance that has been more or less guaranteed since Egypt became the first Arab country to sign a peace treaty with Israel more than three decades ago. The U.S. could opt for more piecemeal moves like the decision to put off the delivery of four F-16 fighter jets and biennial, U.S.-Egyptian military exercises planned for next month, they said.
Protesters last September marched on the U.S. embassy compound in Cairo, scaled the walls and replaced the American flag with the black banner favored by Islamists before a belated response from the government of recently ousted President Mohammed Morsi.
Yet since the army's July overthrow of Morsi, and despite violence between Egyptian security forces and Morsi's Islamist supporters that has killed almost 1,000 people in the last week, U.S. diplomatic facilities in the country have been well protected.
Despite the obvious power imbalance in the U.S.-Egypt relationship, Egypt in some ways has the greater leverage. Many Egyptian citizens and even some in the government deride America's financial assistance as unnecessary interference. The reality, however, is Egypt would likely face even worse economic struggles were it to sacrifice such aid.
But it's the Obama administration which is defending the aid. It has refused to declare Morsi's ouster a "coup d'etat," which would require the U.S. to suspend military and economic funds to Egypt. And President Barack Obama stressed last week that cutting off the assistance "was not in the national security interests" of the United States.
The U.S. has consistently outlined the important operations such money supports from fighting al-Qaida in the heart of the Middle East and safeguarding the stability of the Suez Canal to halting weapons flow to the Hamas-ruled Gaza Strip and ensuring Israel's security.
The protection of American diplomatic assets has been another major, if up to now, unspoken element in U.S. policy considerations, officials said.
The administration doesn't worry that cutting aid would spark an attack on U.S. interests by Egypt's military-led interim authorities. But it does fear that an army already besieged by internal disorder from the deadly standoff in Cairo's streets to the increasingly lawless Sinai Peninsula bordering Israel, could easily turn its cheek to threats against the United States while it is openly and financially expressing its opposition to Egyptian government policies.
Such a scenario would put Americans serving in an already dangerous environment in even greater peril, given Egypt's history of embassy breaches. Beside the U.S., demonstrators penetrated Israel's embassy in 2011 and damaged the facility before a late-night call from Obama spurred Egypt's military into restoring order.
Any attack targeting the U.S. overseas would be a political disaster for Obama, given the continued criticism over his administration's handling of the Sept. 11 attack in Benghazi, Libya, that killed U.S. Ambassador Chris Stevens and three other Americans. Congressional investigations continue almost a year later, and the United States has yet to bring a single perpetrator to justice even if the Justice Department has filed sealed charges against several individuals for alleged involvement in the attack.
A repeat attack would be major blow to Obama as he tries to work with Congress on a domestic agenda including immigration, debt reduction and making his health care overhaul fully operational.
Benghazi has weighed so heavily on the administration's threat perception that it recently closed diplomatic posts across the Muslim world for a week after intelligence suggested an al-Qaida strike against Western targets. U.S. officials insisted they acted out of "an overabundance of caution."