U.S. officials have defended American assistance programs for Egypt, calling the U.S. relationship with the key Mideast ally crucial to stability in the region.

In a recent report, the Government Accountability Office (GAO), the investigative arm of Congress, says the U.S. government has failed to develop specific methods to measure the effectiveness of billions of dollars in aid to Egypt.

For a long time, Egypt has been second only to Israel in the amount of economic and military support assistance, although in recent years U.S. funding has also had to address needs in Iraq and Afghanistan.

Since 1979, Egypt has received about $60 billion in military and economic aid, with about $34 billion coming in the form of foreign military financing (FMF) grants.

However, as aid has continued to flow to Egypt each year, President Hosni Mubarak and his government have come under sharper criticism from lawmakers unhappy with the pace of democratic reforms and the treatment of political dissidents.

At Wednesday's hearing of the House Middle East Subcommittee, Congresswoman Ileana Ros Lehtinen cited what she called cosmetic changes by President Mubarak that she says have ignored fundamental calls for reform from the Egyptian people.

Assistant Secretary of State David Welch praised Egypt's first-ever contested presidential elections last year, while noting that parliamentary polls were marred by irregularities and serious incidents of violence.

He says Washington continues to express concern about the pace of political reform in Egypt, and specific issues such as the postponement of municipal elections and roundups of pro-democracy activists. "The problem that we see in 2006 is more in the general political environment, incarceration of people whose jailing would appear to have a political motivation, bringing some of the judges who were involved in the review process of the elections into some sort of judicial scrutiny is also a problem, a continued problem with the right of peaceful assembly," he said.

Welch says Egypt appears to take one step back for every step forward. What would not help, he adds, is any move by members of Congress to withhold U.S. aid from Egypt which would have negative consequences. "I do not support any withholdings. I think on the economic reform side, we have ambitious and important objectives that can be facilitated by E.S.F (Economic Support Funds). On the military side, I believe this partnership is of strategic importance to the U.S. and withholding anything in that area would have consequences," he said.

The G.A.O. report says the Defense Department has not defined expectations for the modernization of Egypt's military, and recommends setting benchmarks for these and other goals to help U.S. lawmakers address the question of balancing economic and military aid to Egypt.

Wednesday's House hearing was cut short by congressional votes, but not before lawmakers renewed criticism of the jailing of Egyptian democracy activist and opposition politician Ayman Nour.

In a letter to President Mubarak, Democratic Congressman Adam Schiff and Republican Frank Wolf urge the Egyptian leader to pardon Nour, who was convicted on forgery charges, if his appeal before an Egyptian court is rejected.