The US is suspending a large part of the $1.3bn (£810m) in aid it gives to Egypt’s military.
The US said the withholding of aid to Egypt was not intended to be permanent
The delivery of large-scale military systems as well as cash assistance to the Egyptian government would be withheld, said the state department.
It said “credible progress” must be made towards free and fair elections.
A review was launched in August after a crackdown by the authorities on supporters of ousted President Mohammed Morsi left hundreds of people dead.
Officials said the freeze amounted to hundreds of millions of dollars in aid.
Washington also plans to halt a $260m cash transfer and a $300m loan guarantee. It is also halting the delivery of Apache helicopters, as well as Harpoon missiles and tank parts, officials said.
However, the US will continue to provide health and education assistance, and money to help Egypt to ensure security in the increasingly volatile Sinai peninsula.
It said the withholding of aid was not intended to be permanent.
Morsi on trial
In a speech to the UN General Assembly last month, US President Barack Obama criticised Egypt’s military-backed interim government for “decisions inconsistent with inclusive democracy”.
More than 50 people were killed in clashes between Morsi supporters, opponents and security forces in several cities on Sunday.
Thousands of members of the Muslim Brotherhood have also been detained in the past two months.
Mr Morsi is set to go on trial on 4 November on charges of inciting murder and violence, state media reported on Wednesday.
The charges relate to the deaths of at least seven people during clashes between opposition protesters and Muslim Brotherhood supporters outside a presidential palace in Cairo last year.
He has been detained at a secret location since being deposed on 3 July.
Agencies
