Washington has already withheld military aid to Cairo last August following the ouster of President Mohamed Morsi.
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A US official said the move to suspend assistance -- more than $1 billion is given each year -- has been prompted by an "accumulation of events," including recent violence against protesters, dozens of whom were killed over the weekend.
However, National Security Council spokeswoman Caitlin Hayden said an announcement is coming soon but denied the United States is "halting all military assistance."
"We will announce the future of our assistance relationship with Egypt in the coming days, but as the president made clear at UNGA, that assistance relationship will continue," Hayden said in a statement.
The US administration has been considering suspending military and economic aid ever since Egypt's military toppled Morsi last July. At the time Washington refused to define Morsi's ouster as a military coup claiming that the transfer of Funds to Cairo was in the US's national interest.
According to CNN, some military aid could continue, including funds to uphold Egypt's obligations under its peace treaty with Israel, and money for counterterrorism and security in Sinai, where extremists have been able to set up base, according to a senior US official.
The United States will also maintain nonmilitary funding that helps democracy promotion, an official said.
Last weekend saw the deadliest crackdown on protesters since August, and some 51 Egyptians were killed and more than 200 injured in clashes with security forces.
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