Defense Secretary Chuck Hagel said he had called General Abdel Fattah El-Sisi, Egypt's defense minister and the central figure in the interim government, to express US concern after Wednesday's brutal crackdown on supporters of ousted president Mohamed Morsi.
"The Department of Defense will continue to maintain a military relationship with Egypt, but I made it clear that the violence and inadequate steps towards reconciliation are putting important elements of our longstanding defense cooperation at risk," Hagel said.
Hagel's warning follows an earlier announcement from President Barack Obama cancelling a joint exercise due to be held next month because of the Egyptian army's violent crackdown Wednesday that left hundreds of protesters dead.
"Since the recent crisis began, the United States has made it clear that the Egyptian government must refrain from violence, respect freedom of assembly, and move toward an inclusive political transition," Hagel said.
"Recent developments, including the violence that has resulted in hundreds of deaths across the country, have undermined those principles."
Due to the US military's decades-long ties with the Egyptian army, Hagel has become the Obama administration's main conduit for communicating with Cairo as the crisis has unfolded.
The Pentagon chief has had more than 15 phone conversations with El-Sisi since July 2, the day before the army's coup that removed president Mohammed Morsi from power.
"In my discussion with Minister Al-Sisi, I reiterated that the United States remains ready to work with all parties to help achieve a peaceful, inclusive way forward," Hagel added.