CAIRO (Reuters) - Egyptian President Abdel Fattah al-Sisi met U.S. presidential adviser Jared Kushner on Wednesday after the United States decided to withhold millions of dollars in aid.

FILE PHOTO: Senior advisor Jared Kushner waits for a joint news conference by U.S. President Donald Trump and Lebanese Prime Minister Saad Hariri at the White House in Washington, U.S., July 25, 2017. REUTERS/Yuri Gripas

Two U.S. sources familiar with the matter told Reuters on Tuesday that Washington had decided to deny Egypt $95.7 million in aid and to delay a further $195 million because it had failed to make progress on respecting human rights and democracy.

Kushner’s visit, part of a wider Middle East trip, had been scheduled before the U.S. aid decision was announced and had been billed as an opportunity for discussing the peace process between Israel and the Palestinians.

Kushner, son-in-law of U.S. President Donald Trump and one of his close advisers, met Sisi with Foreign Minister Sameh Shoukry present, Sisi’s office said in a statement.

He later had a separate meeting with Shoukry, the foreign ministry said.

Neither the presidency nor the foreign ministry mentioned the aid issue in statements released after the meetings, though the foreign ministry had earlier criticized the decision, saying it would have an impact on achieving common goals.

“Egypt sees this measure as reflecting poor judgment of the strategic relationship that ties the two countries over long decades and as adopting a view that lacks an accurate understanding of the importance of supporting Egypt’s stability,” the foreign ministry said in a statement.

The decision could have “negative implications” on achieving common goals and interests between the two countries, it added.

Shortly after this foreign ministry statement, a one-on-one meeting between Shoukry and Kushner was removed from the schedule. But the two men later met separately after the joint meeting involving Sisi.

KEY REGIONAL PARTNER

Egypt is an important regional partner for the United States because of its control of the Suez Canal and its border with Israel. It receives $1.3 billion in aid annually.

The decision to withhold some aid reflects a U.S. desire to continue security cooperation as well as its frustration with Cairo’s stance on civil liberties.

In particular, a new law regulating non-governmental organizations is widely seen as part a growing crackdown on dissent, said the U.S. sources, who spoke on condition of anonymity.

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Egyptian rights activists have said they face the worst crackdown in their history under Sisi, accusing him of erasing freedoms won in the 2011 Arab Spring uprising that ended Hosni Mubarak’s 30-year rule.

Egyptian lawmakers have said the NGO law is needed to protect national security. The Egyptian government has long accused human rights groups of taking foreign funds to sow chaos, and several are facing investigation over their funding.

The decision does not mean relations between Sisi and Trump, who have repeatedly spoken warmly about each other, are changing, analysts say.

“I think rather than see this as a sign of a change in the positive relationship between Sisi and Trump, it’s more of a sign of the dysfunction in Washington and the Trump administration,” said H.A. Hellyer, senior non-resident fellow at the Atlantic Council.

“If anyone thinks that this means more pressure on Cairo with regards to human rights, I think they are sorely mistaken – rather, the conclusion we ought to be drawing is that the Trump administration continues to make unpredictable and inconsistent decisions due to internal dysfunction. One could even call it ‘palace politics’,” he said.