Egypt Protests Leave West in Awkward Position

LONDON (Reuters) - As protests escalate in Egypt and elsewhere, Western governments are awkwardly trapped between strategic alliances, their own rhetoric on democracy and rights and domestic political sympathy for those demonstrating.

Police and demonstrators fought running battles in the streets of Cairo on Friday on a fourth day of unprecedented protests by tens of thousands demanding an end to President Hosni Mubarak's three decades of rule.

Hundreds have been arrested following mass demonstrations inspired by events in nearby Tunisia, where President Ben Ali fled into exile earlier this month after social media-fuelled protests forced him from power.

Yemen's government -- another key U.S. regional ally -- has also faced mounting protests as activists across the Middle East and elsewhere gain inspiration from each other.

Washington and others have long quietly relied on sometimes repressive regional rulers, seeing them as a bulwark against Islamic extremism. Now they face few good options.

"They haven't managed this balancing act very well and now they are caught in the middle," said Rosemary Hollis, professor of Middle East policy studies at London's City University.

"They have maintained this polite fiction that they are in favour of democracy and openness but in reality they have been happy to allow regimes to avoid reforms."

Hollis says the strong performance of Islamists Hamas in 2006 Palestinian elections in the Gaza Strip scared many policymakers and deterred them from pushing for genuine democratic reform elsewhere in the region.

U.S. officials including President Barack Obama have called for restraint, while Secretary of State Hillary Clinton urged Cairo to engage the Egyptian people about reform and seize the moment is to address aspirations.

British foreign secretary William Hague said Egypt's authorities should not "suppress people's right to freedom of expression", but again seemed keen to held back from taking sides.

If Western capitals voice outright support for the demonstrators as they did during protests in Iran in 2009, they risk alienating old friends and further emboldening those on the streets.

If security forces crack down brutally, Western leaders will fear the accusation of complicity in rights abuses.

But if more leaders are ousted, a tide of unrest could bring Islamist governments to power and hit regional stability.

DIFFICULT CHOICES

"It's going to be very difficult for the U.S. to tack away from Mubarak, even if they're careful not to offer support for a crackdown," said Ian Bremmer, president of political risk consultancy Eurasia Group.

Egypt is also seen as a key ally against Iran, central to limiting weapon-smuggling to Palestinian Hamas militants in the Gaza Strip. The Suez Canal remains crucial to Europe's imports of oil and cheap Asian goods.

"The least bad option may be to stick with nurse, for fear of finding something worse -- but at the same time try to nudge in the direction of political and economic reform," said Nigel Inkster, a former Deputy Chief of Britain's Secret Intelligence Service MI6 and now head of transnational threats and political risk at London's International Institute for Strategic Studies.

"Ultimately, the U.S. and European powers can do little more than wait upon events and try to ensure they do not unduly antagonise whoever comes out on the winning side."

Western leaders will also be keeping a careful eye on their own public opinion. News organisations and a growing number of politically active young people watch the Tunisian and Egyptian protests closely on sites such as Twitter, and would be very critical of perceived Western acquiescence in bloodshed.

"Part of the political strategy in events like this has always been about influencing Western public and media opinion and therefore to an extent government policy," said Mark Hanson, a former new media strategist for Britain's Labour Party and London-based social media consultant.

"These protesters are doing that very well."

"UNTOUCHABLE COMPENSATION"

Leaked classified US diplomatic cables released by WikiLeaks on Friday showed diplomats continuing to press Mubarak and his government toward democratic reform, the reduction of censorship and the easing of a state of emergency.

But they also make it clear U.S. financial aid to Mubarak's government -- particularly to the military who may prove a deciding factor if protests continue to rise -- is a requirement for good relations.

"President Mubarak and military leaders view our military assistance program as a cornerstone of our mil-mil relationship and consider the $1.3 billion in annual FMF (foreign military funding) as untouchable compensation for making peace with Israel," says a Febuary 2010 cable aimed at briefing US Chairman of the Joint Chiefs Admiral Mike Mullen for a visit.

Egypt's army could decide Mubarak's fate and act as kingmakers if they choose not to back him, deciding which other political forces -- ranging from the Muslim Brotherhood to former UN nuclear chief-turned-political dissident Mohamed El Baradei or Mubarak's son Gamal -- might gain influence.

Gamal, 47, is seen having allies in government and business as well as in the West but less clout with the army. Both Gamal and his father deny he is being groomed for succession.

"Gamal is the sort of person they love somewhere like Davos," said City University's Hollis, referring to the World Economic Forum of business and political leaders taking place in Switzerland.

"But his last name is Mubarak and that damns him on the streets. It's really the army that will decide. The army elite is very close to Washington but you have to ask how much anti-American -- and anti-Israeli -- sentiment there might be in the lower ranks."