IE 11 is not supported. For an optimal experience visit our site on another browser.

Egypt: Morsi is under house arrest and Obama orders review of U.S. aid

The Egyptian military seized power Wednesday from President Mohammed Morsi following demonstrations and days of unrest over the leadership of Morsi's Muslim Bro

The Egyptian military seized power Wednesday from President Mohammed Morsi following demonstrations and days of unrest over the leadership of Morsi's Muslim Brotherhood.

Hundreds of thousands of people gathered in Cairo's Tahrir Square responded with roars, applause, and fireworks marking an end to what had become an unruly regime. Morsi had been elected the year before in the wake of Egypt's overthrow of decades of dictatorship by Hosni Mubarak.

General Abdul Fatah Khalil Al-Sisi, the commanding general of the armed forces, said on Egyptian television that the head of the constitutional court would be the acting president, with new elections to be held later. A senior advisor to the Freedom and Justice Party and spokesman for the Muslim Brotherhood confirmed that Morsi was under house arrest at the Republican Guard Club. Most members of his presidential team were also under house arrest.

Egypt, long a central U.S. ally in the Middle East, is the largest and most important Arab country. Egypt receives roughly $1.3 billion in military aid from the United States, funds that could be at risk in coup. Although it did not seed the Arab Spring, the fact that Egyptians became such a key part of the movement that began in Tunisia, gave rise to other protests and calls for freedom across the Middle East.

The initial change in power, which brought Morsi to the presidency, was an early test for the Obama administration and how it would respond to calls for democracy that also meant the exit of strategic partnerships begun decades earlier. Just a day earlier, the Obama administration was cautious in its response to demonstrations calling for Morsi's ouster and strongly denied that it was pushing for early elections.

President Obama issued a statement that said in part, "The United States is monitoring the very fluid situation in Egypt, and we believe that ultimately the future of Egypt can only be determined by the Egyptian people." He called on the Egyptian military "to move quickly and responsibly to return full authority back to a democratically elected civilian government as soon as possible through an inclusive and transparent process." And he concluded by saying that "the longstanding partnership between the United States and Egypt is based on shared interests and values, and we will continue to work with the Egyptian people to ensure that Egypt's transition to democracy succeeds."

The president said he would order an assessment of what the military's actions meant for U.S. foreign aid to Egypt. U.S. law says the government must suspend foreign aid to any nation whose elected leader is ousted in a coup d'etat. The U.S. provides $1.5 billion a year in military and economic assistance to Egypt, a key U.S. national security priority.

Following the coup, State Department officials ordered all non-essential U.S. embassy staff and families to leave Egypt as soon as possible and to avoid all demonstrations, even seemingly peaceful protests.

Egyptians, new to the democratic process, quickly grew weary of Morsi's Muslim Brotherhood, a party founded on Islamic faith in a largely secular state that had never been run by religious rule. Further unrest boiled over for the almost 83 million people living in Egypt as Morsi's rule failed to bring on the economic stability they had hoped for and expected.

“This was an experiment in political Islam that many in Egypt say went terribly wrong," NBC News' Richard Engel reported from Tahrir Square. "They didn’t have the institutions to impeach him—there were not the political structures in place to do anything else to remove him."

Tensions culminated on Monday when the military issued a 48-hour ultimatum for Morsi to step down and allow new elections following an "unprecedented" display of public support for his ouster—the government estimates that least 16 people have been killed, and another 200 injured in the demonstrations.

Morsi rejected the military's calls in a speech televised overnight Tuesday, and passionately defended his right to rule, focusing on his ascension to power through a democratic election. "If the price of preserving legitimacy is my blood, I am prepared to pay it," he said.

Both sides sparred with competing statements posted onto Facebook—the social media site that sparked the beginnings of the initial Arab Spring uprisings—as the deadline came and went Wednesday afternoon, local time. Armored vehicles, tanks and troops soon advanced along the outskirts of the capital as cheers of jubilation rang out in the square.

With the military takeover, Egypt now enters uncertain political territory, creating renewed instability in the Middle East as conflicts rage in nearby Syria, and the United States attempts reconciliation among Israelis and Palestinians.

Sisi had been appointed by Morsi but the relationship did not help to ease tensions and suspicions between the military and the Muslim Brotherhood.

The general and advisers met earlier in the day with Mohamed Elbaradei, the former head of the U.N. Nuclear Agency who returned to Egypt last year and worked hard to ferment democratic change in his native country. Elbaradei knows Obama and many world leaders personally from his work at the U.N. and has served as both a sounding board and mediator during the last tumultuous year of political change.

Updated at 8:15 p.m.