It couldn't be any more obvious that the Obama Administration hasn't the faintest idea how to approach this. They're preaching "peace" and how "the Egyptian people need to resolve this themselves", but you're already getting angry Egyptians talking about how the gas canisters the police are shooting at them are labeled "made in the USA".
America cannot remain neutral, but it's almost certain that they really, really want to keep a reliable ally in Egypt. Democratic governments are rarely "reliable" in that sense. Especially considering America's track record in the region is, ah, somewhat weak. But they don't want to be on the wrong side of a future government, and don't want the heat from being seen as anti-Democratic.
(And, honestly, I suspect many in the Administration aren't big fans of dictatorial governments in the first place. Barry et al have their issues, but these aren't Republicans we're talking about.)
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