Egypt on Thursday criticised the US decision to halt some aid to the army-backed government following a crackdown on the Muslim Brotherhood that has plunged the country into a violent political crisis.

Washington faces a dilemma in dealing with a major regional ally that controls the strategic Suez Canal and borders Israel but whose army overthrew the first freely elected president, Mohamed Mursi, after mass protests against his rule.

It said on Wednesday it would withhold deliveries of tanks, fighter aircraft, helicopters and missiles as well as $260 million in cash aid but left some other aid programmes intact.

The US position highlights the dilemma and also exposes differences with key Gulf ally Saudi Arabia, which had welcomed Mursi's removal and has lavished extensive financial support to the new government.

It also raises the question of where Egypt, the second largest recipient of US aid after Israel, could now turn for more military aid.

"The decision was wrong. Egypt will not surrender to American pressure and is continuing its path towards democracy as set by the roadmap," Foreign Ministry spokesman Badr Abdelatty told a private Egyptian radio station Radio FM.

Abdelatty later said in a statement the decision "posed serious questions around the United States' readiness to provide stable strategic support for Egypt's security programmes".

The decision was made pending progress on democracy and human rights but the State Department said it would continue military support for counter terrorism, counter-proliferation and security in the Sinai Peninsula, which borders US ally Israel. It will also continue to provide funding in areas such as education, health and private sector development.

The private, anti-Islamist leaning Tahrir newspaper was even bolder in its criticism, with a headline proclaiming, "Let the American aid go to hell".

US Defence Secretary Chuck Hagel called Egyptian army chief General Abdel Fattah al-Sisi to tell him about the decision, stressing the relationship's importance but underscored that Egypt must move towards democracy.

The military denies it carried out a coup, saying it responded to the will of the people.

Abdelatty, the foreign ministry spokesman, said Egypt was "keen on continuing good relations with the United States".

"(Egypt) will take decisions relating to internal affairs with complete independence, without external influences and will work on guaranteeing to secure its vital needs in a continued and orderly manner, especially with regards to national security," he added.

Egypt has for decades been among the largest recipients of U.S. military and economic aid because of its 1979 peace treaty with Israel, which agreed as a result of the pact to withdraw from the Sinai Peninsula it seized from Egypt in 1967.

The United States has long provided Egypt with about $1.55 billion in annual aid, including $1.3 billion for the military. - Reuters