Egypt in turmoil: What the chaos means for the US

Plumes of smoke rise from a damaged petrol station during a violent crackdown by Egyptian security forces on a pro-Morsi sit-in demonstration at the Rabaa al-Adweya Mosque in the Nasr City district on Aug. 14, 2013, in Cairo.
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Plumes of smoke rise from a damaged petrol station during a violent crackdown by Egyptian security forces on a pro-Morsi sit-in demonstration at the Rabaa al-Adweya Mosque in the Nasr City district on Aug. 14, 2013, in Cairo.

Egypt was seen less than three years ago as a potential wellspring of long-awaited Arab democracy. Now it appears to be falling apart.

Almost 1,000 people have been killed since last week in clashes between security forces, backed by the ruling military, and supporters of Mohammed Morsi, the first legitimately elected president in Egyptian history, who was ousted in July.

Experts on the Middle East say the situation on the ground is direly confusing for the Egyptian people, with questions over who is on the side of right and wrong, who is killing whom and who deserves support practically impossible to answer.

For Americans following the story from thousands of miles away, what the chaos on the ground may mean for the U.S. is confounding.

Here's a look at what is happening in Cairo, how America is involved and what it means for the U.S. relationship with Israel and U.S. security.

Which side are you on?

Egypt is caught in a cycle of violence, and no one seems to have much hope that it will end soon.

Egyptians are subjected daily to a portrayal by both state and private media that the military is fighting not political opponents in the Muslim Brotherhood but terrorists, one expert said. Individual families are divided about whom to support and blame.

"There's confusion as to who the good guys are and who the bad guys are," said Khaled Elgindy, a fellow at the Saban Center for Middle East Policy, part of the Brookings Institution policy research center.

"The more dead there are on all sides, the more fear in the public, a political resolution may not even be possible," he said. "Egypt could be in for some serious instability for a while."

Human Rights Watch on Monday accused the Egyptian security forces of carrying out the worst unlawful killings in modern Egyptian history by firing on pro-Morsi supporters at a demonstration last week.

The rights organization pleaded with the military to rein in the police and stop making a bad situation worse by unnecessarily using lethal force. Containing the violence may be possible, but there is no sign of a political solution anytime soon.

The military could escalate the crackdown on the Brotherhood by banning it and outlawing its activities in all forms. That would raise questions about the future of political Islam in the country that gave birth to it.

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Most analysts can not conceive of an Egyptian political scene without any type of Islamist representation in politics. The question is how will they convince Islamists to return to the political process.

To aid, or not to aid?

A growing number of lawmakers, Republican and Democratic alike, have urged the Obama administration to suspend the $1.5 billion in aid that the United States provides to Egypt every year, at least until the country is stabilized.

(Related video: We would regret cutting aid to Egypt: Pro)

The administration has been twisted into something of a linguistic pretzel because American law prohibits the continuation of aid to a country after a "coup." The White House has been careful not to use that word.

The Obama administration is considering suspending delivery of Apache helicopters that it has already agreed to sell to Egypt, and it has canceled joint military exercises with Egypt, but those measures are seen as mostly symbolic.

Josh Earnest, a White House spokesman, said Monday that the administration is pushing the Egyptian military to transition back to democracy and to respect human rights.

"We have made our position on these issues, on these very important issues, crystal clear," he said.

Defense Secretary Chuck Hagel said the United States was "reviewing every aspect" of its relationship with Egypt but conceded: "Our ability to influence the outcome in Egypt is limited."

Saudi Arabia, Kuwait and the United Arab Emirates, which want the Muslim Brotherhood crushed, promised to provide $12 billion in aid to Egypt this year, giving those countries far more leverage, said Sen. Bob Corker, R-Tenn.

"We're into that cycle of revenge," he lamented in an interview on the MSNBC program "Andrea Mitchell Reports." "Our country is in a very tough position."

(Related video: Egypt: Muslim Brotherhood weakened further)

U.S. and Israel: No conflict?

Israeli Prime Minister Benjamin Netanyahu has told his cabinet not to talk publicly about the conflict in Egypt, but government officials have been expressing support for the military anonymously through media. The government hopes to hold back Islamic fundamentalism on the Sinai, which borders Israel.

U.S. consideration of withholding some military aid to Egypt "raised eyebrows" in Israel, one Israeli official told Reuters on condition of anonymity. Israel and Egypt signed a peace treaty in 1979, after the Camp David Accords.

Other Israeli officials told the news service that while Israeli leaders "say what we think" to Washington, they are not campaigning to get President Barack Obama to go easy on the military.

The al-Qaeda connection

There's another problem with the widening mess in Egypt: Al Qaeda is seizing on images of dead Islamist protesters to spread the idea that it is being victimized, and that Egypt should abandon any try at democracy in favor of Islamic law.

"If ever there's a ripe moment 2 support Al-Qaeda, it's surely now," a Kenyan offshoot of the al Qaeda affiliate al Shabaab said on Twitter, according to Reuters. "Raising the flag in Egypt is now a priority."

(Related video: Egypt on the edge as violence escalates)

And in a twist, the ostracizing of the Muslim Brotherhood may foment extremism—fulfilling the military's portrayal of its political opponents as terrorists, Elgindy said.

"If things continue along these lines of a heavy-handed crackdown, we're going to see Brotherhood cadres gravitating more toward the jihadis," he said.

"Not only was their part in policy negated by the military, they're being excluded from the political sphere," he said. "The only impact, some of them may reason, is to resort to violence. They feel wronged."

—By Ayman Mohyeldin and Erin McClam for NBC News.

—Reuters and The Associated Press contributed to this report.