By Phil Stewart and Matt Spetalnick
WASHINGTON (Reuters) - President Barack Obama has halted the delivery of four F-16 fighter jets to Egypt, U.S. officials said on Wednesday, in the strongest signal yet of U.S. impatience with Egypt's armed forces after its toppling of President Mohamed Mursi.
The decision appears to underscore deepening U.S. concern about the course taken by the Arab world's most populous country, reeling from violent street clashes following Mursi's July 3 overthrow.
Still, Obama administration officials offered no hint that the decision on the F-16s signaled a shift in broader U.S. policy on aid to Egypt. Washington still has not decided whether to call Mursi's overthrow a coup, something that would legally trigger a cut-off in U.S. assistance.
However, suggesting mounting impatience with Egyptian generals' handling of the situation after Mursi's ouster, an administration official said one of the main objectives was to press the military-led government in Cairo to "move forward and get this democratic transition correct."
U.S. Defense Secretary Chuck Hagel informed Egypt's military chief, General Abdel Fattah al-Sisi, of Obama's decision to halt the delivery of the F-16s in a phone call on Wednesday, the Pentagon said.
"Given the current situation in Egypt, we do not believe it is appropriate to move forward at this time with the delivery of F-16s," Pentagon spokesman George Little said, referring to the situation on the ground as "fluid."
Sisi has called for mass rallies on Friday to give him a mandate to tackle surging violence, fanning fears within Mursi's Muslim brotherhood of a military crackdown. The Muslim Brotherhood has warned of possible civil war.
Sporadic street clashes in recent days have killed more than 100. An overnight bomb attack on a police station north of Cairo killed one person and wounded two dozen.
BRIGHT STAR TO GO AHEAD
Obama's decision came two weeks after Reuters reported U.S. plans to go ahead with the delivery of the F-16s, despite Mursi's removal.
The Pentagon on Wednesday stressed the importance of ties with Egypt's armed forces and said there was no freeze on overall military assistance, which totals $1.3 billion a year.
This year's Bright Star military exercise with Egypt is still scheduled to go ahead as planned, for example, it said.
"It shouldn't be seen as distancing ourselves from the military," the Obama administration official said, speaking on condition of anonymity.
Egypt has been one of the world's largest recipients of U.S. aid since it signed a 1979 peace treaty with Israel.
It was the first Arab country to buy F-16s, widely viewed as a symbol of political and security ties with Washington. U.S.-Egyptian co-production of the M1A1 Abrams battle tank has also been a key part of U.S. assistance.
Obama administration officials played down any connection between the decision on the F-16s and the White House and State Department review of whether to call Mursi's overthrow a coup.
The foot-dragging by the administration has been viewed in Egypt as tacit support for military's overthrow of Mursi.
"The bottom line is, as we've been saying all along, you had tens of millions of people who basically felt like this was the popular will of the people," the Obama administration official said.
"But to be fair, you have tens of millions of people who feel there was an election, Mursi won ... It's not a black-and-white issue on either side."
Lockheed Martin, which builds the jets and is the Pentagon's biggest supplier, declined comment on the issue.
For fiscal year 2013, which ends in September, the United States had already disbursed $650 million in military aid to Egypt as of July 10. An additional $585 million was pending.
An additional eight F-16s are due to be delivered in December. It was not clear whether those deliveries had been suspended as well.
(Additional reporting by David Alexander and Roberta Rampton; Editing by Christopher Wilson and Mohammad Zargham)