The decision to withhold some financial and military aid came as a surprise after President Donald Trump pledged strong tries with the key US ally after they had deteriorated under his predecessor Barack Obama.
The US delegation on a regional visit had been scheduled to meet Egyptian Foreign Minister Sameh Shoukry on Wednesday, but the meeting was dropped from the latest schedule sent to reporters by his spokesman’s office.
Egyptian media however quoted President Abdel Fattah al-Sisi’s spokesman Alaa Youssef as saying the president would meet the delegation.
In a statement, the foreign ministry said it “regrets the decision” to reduce some funds allocated under a US assistance programme and withhold the disbursement of other military aid.
It provided no details of the cuts, but US media reports said Washington on Tuesday denied Egypt $96 million in aid and delayed $195 million in military funding because of concerns over its human rights record.
“Egypt considers this step as a misjudgment of the nature of the strategic relations that binds the two countries over decades,” the foreign ministry said.
The move “implies a mixing of cards that may have negative repercussions,” it said.
The New York Times quoted the State Department as saying the move followed a lack progress on human rights and a new law restricting activities of nongovernmental organisations.
Trump’s arrival in office earlier this year saw an improvement in relations with Egypt, after Obama had given Sisi the cold shoulder over rights issues.
Obama temporarily suspended military aid to Egypt after the July 2013 overthrow of Islamist president Mohamed Morsi and a bloody crackdown on Morsi’s supporters that followed.
Sisi in May ratified the NGO law, which critics say will severely restrict the work of civil society, including by banning studies without prior permission from the state, with large fines for violating the law.
Trump set aside criticism of Sisi’s rights record while pledging to maintain support for the key US ally, which receives an annual $1.3 billion in military aid.
Egyptian authorities have been fighting an insurgency based in the north of the Sinai Peninsula, where an Islamic State group affiliate has killed hundreds of soldiers and policemen.
The Pentagon is also concerned with preventing jihadists from crossing Libya’s porous border with Egypt.