Kerry urges Egypt unity as US pledges $250 mn aid

CAIRO (AFP) - US Secretary of State John Kerry on Sunday urged Egypt to make compromises to end its political divisions, as he pledged $250 million in US aid to help revive the country's dilapidated economy.

Kerry wrapped up a two-day visit to Cairo with a "candid and constructive" meeting with Islamist President Mohamed Morsi in which he called on the bitterly divided Egyptian political factions to unite.

"It is clear that more hard work and compromise will be required to restore unity, political stability and economic health to Egypt," Kerry told Morsi, according to a statement issued by the top US diplomat.

He told Morsi that Washington was now offering $250 million in aid to Cairo.

"Today I advised him the United States will now provide the first $190 million of our pledged $450 million in budget support funds," Kerry said, adding Washington also pledged an additional $60 million for a new joint Egyptian-American Enterprise Fund.

The aid was pledged after "Morsi's assurance that he plans to complete the IMF process," the statement said, referring to a $4.8-billion loan Egypt is negotiating with the International Monetary Fund.

The loan would help restore confidence in Egypt's economy, which has suffered a sharp decline since the uprising that overthrew Hosni Mubarak in February 2011.

On Saturday, after flying to Cairo from Turkey, Kerry stressed the importance of the IMF loan in a meeting with Egypt's business leaders.

"It is paramount, essential, urgent that the Egyptian economy gets stronger, that it gets back on its feet," he said. "It is clear to us that the IMF arrangement needs to be reached. So we need to give the marketplace the confidence." Kerry said Washington was prepared to help Egypt, which has seen its foreign currency reserves slide to a critical level and the Egyptian pound lose around eight percent against the dollar.

On Saturday, he urged Egyptian political and business leaders to reach "common ground" after months of political turmoil and unrest.

Kerry's visit came with Egypt deeply divided between Morsi's mainly Islamist allies and a wide-ranging opposition that accuses the president of failing to address the country's economic needs and political concerns.

On his first tour as secretary of state, Kerry met British Prime Minister David Cameron, French President Francois Hollande and Turkish Prime Minister Recep Tayyip Erdogan before coming to Cairo.

"All of them are prepared to be helpful but all of them believe that Egypt needs to make some fundamental economic choices," Kerry said on Saturday.

He began the Cairo leg of his trip by meeting Arab League chief Nabil al-Arabi and the League's former chief Amr Mussa, as dozens of protesters burned his picture outside the foreign ministry and chanted against perceived US support for Morsi.

But Kerry insisted that Washington was not biased towards any party.

"I make it particularly clear today on behalf of President (Barack) Obama and the American people that we come here as friends for the Egyptian people, not for one government, or one person or one party or one ideology but for the Egyptian people." On Saturday, Kerry also spoke with Mohamed ElBaradei by telephone.

ElBaradei and opposition figure Hamdeen Sabahi had refused to meet him in person.

The two, along with Mussa, are leading figures in the National Salvation Front, a coalition of liberal and leftist parties opposed to Morsi, which has announced a boycott of parliamentary elections that begin next month.

Later on Sunday Kerry flew to Riyadh where he will hold meetings on Iran and the deadly conflict in Syria with his counterparts from the Gulf Cooperation Council, the group of six Gulf monarchies including Saudi Arabia.

"We thank Kerry for America's commitment with regard to the security of the region and we will share our concerns about the relationship with Iran and the developments in Syria," Bahraini Foreign Minister Sheikh Khaled al-Khalifa told reporters after meeting his GCC counterparts ahead of Kerry's arrival.

After Riyadh Kerry will head to Abu Dhabi on Monday and later to Qatar.

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