President Morsi Ousted: First Democratically Elected Leader Under House Arrest

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Military Coup in Egypt Under Way

The U.S. gives Egypt $1.3 billion in military aid annually. United States foreign aid law states that, in general, the U.S. cannot give direct military funding to any country that is being run by a military government, particularly after a coup has overthrown a democratically elected leader. But the cut in funding is not automatic.

There is room for exceptions, which then allow the administration to take circumstances of the situation into account to determine continued funding.

Little told reporters today that the administration would not speculate on whether aid will be cut in light of the Egyptian military's actions.

"We're still in a period where speculation probably isn't prudent. We need to walk very carefully through this situation," he said. "This is a crisis that involves the Egyptian people and the focus should be on them and their focal process and what decisions they make in the coming hours and days."

The Obama administration has stressed that it will not take sides in the conflict, but the United States is caught between supporting a military it continues to enjoy close ties with that provides security to Egypt and to the region, and supporting Egypt's democratic process with a government that has been seen as largely ineffective and increasingly dictatorial.

ABC News' Luis Martinez contributed to this report.

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