WASHINGTON (Reuters) - The ambiguous outcome of Egypt's revolution leaves Washington no choice but to deal with the country's two major players, the military and the Muslim Brotherhood, despite its disagreements with each.
Mohamed Mursi of the Muslim Brotherhood, an Islamist movement long held at arm's length by the United States, was declared on Sunday to have won Egypt's presidency.
He assumes an office whose powers have been whittled away by the military, whose recent actions are seen as anti-democratic but which remains the country's most powerful institution.
The military and the Muslim Brotherhood are wrestling over how to share power in a country that for the time being has no sitting parliament, no permanent constitution and no clear path toward democracy after last year's ouster of Hosni Mubarak, a long-time U.S. ally who banned and oppressed the Brotherhood.
As a result, current and former U.S. officials say, the United States faces a multidimensional diplomatic challenge. It must deal with everyone as it tries to sustain strategic cooperation with Egypt on its peace treaty with Israel and U.S. access to the Suez Canal, while advocating for democracy in a country whose dominant popular force is an Islamist party.
Working with the Muslim Brotherhood is particularly sensitive for the Obama administration.
The group has renounced violence itself, but has spawned violent spinoffs in the past. Some of its officials have previously questioned Egypt's 1979 peace treaty with Israel and the rights of women and minorities such as Egypt's Coptic Christians.
"We're keeping the lines open" to all sides, said one U.S. official who spoke on condition of anonymity.
The deliberate even-handedness was visible on Sunday when U.S. President Barack Obama took the rare step of calling both Mursi and Ahmed Shafik, the former Air Force chief and prime minister who lost the presidential election.
The United States has limited ability to influence events in Egypt, Middle East analysts say, and is better off letting the military, the Muslim Brotherhood and the rest of the society work out an accommodation.
"This is not a made-in-America issue," said Rob Danin, a State Department official under President George W. Bush now at the Council on Foreign Relations. "The United States can't really affect it too much, nor should it try in the short term."
The power struggle playing itself out in Egypt is visible in a series of recent events.
These include the Supreme Constitutional Court's June 14 ruling to dissolve the Muslim Brotherhood-dominated parliament - an outcome widely believed within Egypt to have been engineered by the military.
On June 18, the ruling Supreme Council of the Armed Forces gave itself the power to legislate until a new parliament is elected, a veto over a new constitution and the right to choose a new assembly to draft a constitution if need be.
Both institutions are problematic partners for the United States - the military because of what analysts regard as their recent anti-democratic actions and the Muslim Brotherhood because of the uncertainty about its long-term policies.
"It is a tough problem. I think in some ways the Brotherhood is the easier side of the equation," said a congressional aide.
Speaking on condition of anonymity, the aide said the White House appeared willing to deal with the Brotherhood as long as it acted democratically and inclusively and did not cross U.S. red lines on issues such as peace with Israel and the Suez Canal.
"We've been there before. We've seen Turkey. We've seen Tunisia. We've seen that people who call themselves Islamists might be OK," he said. "We are going to judge behavior, not history."
In a televised address on Sunday, Mursi pledged to be a president for all Egyptians and to unite the nation and, in a gesture directed at Israel's concerns, he promised to uphold all international treaties.
Still, there is ambivalence within the U.S. foreign policy community - notably among pro-Israel conservatives - about the Brotherhood given its officials' past statements calling for a review of the peace treaty and pledging to implement Islamic sharia law and its vociferous criticism of Israel.
"The fear is that rather than setting standards for the Brotherhood, we'll just jump in and say 'Well, they won; now let's all be friends,'" said Elliott Abrams, a deputy national security adviser under Bush.
"I think we need to put pressure on them on questions like the role of women in society, the role of the Copts in Egyptian society, Egypt's relations with Hamas," he added, referring to the Palestinian Islamist group that rules the Gaza Strip.
On Wednesday, U.S. Secretary of State Hillary Clinton made some of those points, calling on Mursi to include women, Copts and secular liberals as he forms a government.
"We've heard some very positive statements thus far, including about respecting international obligations, which would, in our view, cover the peace treaty with Israel. But we have to wait and judge by what is actually done," she said.
While he Brotherhood, a sprawling religious, political and social movement, has officially renounced violence, its militant spinoffs include Hamas and al Qaeda leaders such as Ayman al-Zawahri.
U.S. officials acknowledge strain between their desire to deal with an array of Egyptian politicians and their ambivalence about the Muslim Brotherhood's history and its members, some of whom have been barred from visiting the United States.
"There is this tension. More people want to see us. We want to see more people," said one U.S. official who spoke on condition of anonymity. "Our relationship is evolving even as the individuals evolve and the nation (Egypt) evolves."
Despite U.S. visa bans and sanctions on Brotherhood leaders, U.S. officials sporadically conducted low-key contacts with Brotherhood representatives for years, often through Egyptian parliamentarians affiliated with the movement.
Last year, following Mubarak's ouster during the "Arab Spring" of popular protests, U.S. officials resumed what were described as formal diplomatic contacts with the movement.
Representative Mike Rogers, Republican chairman of the House intelligence committee, said the United States should be wary.
"There was a whole host of al Qaeda leadership that had been Muslim Brotherhood that graduated to al Qaeda," Rogers said.
"Do I think there are moderate Muslim Brotherhood individuals we are going to have to reach out to and talk to? Yes. But we are going to have to watch it carefully," he added.
Additional reporting by Mark Hosenball and Tabassum Zakaria; editing by Mohammad Zargham