(CNN) -- As though there were not enough tumult in Egypt, a new crisis has soured its strongest Western ally and threatened to sever military aid a year after revolution felled a longtime dictator.
Egyptian authorities had been investigating civil society organizations for a while but they stunned U.S. officials by announcing this week that 43 foreigners working for such groups would face prosecution. That includes 16 Americans, according to the State Department.
Egyptian officials blamed ongoing unrest in their country on foreign interference.
Authorities carried out 17 raids on the offices of 10 organizations, including the U.S.-based Freedom House, National Democratic Institute and the International Republican Institute. Among those going to court is Sam LaHood, the son of U.S. Transportation Secretary Ray LaHood.
Not a wise decision by the Egyptians, said journalist Ashraf Khalil, author of "Liberation Square: Inside the Egyptian Revolution."
"You never, ever, mess with the son of a (government official)," Khalil said. "I never expected foreigners would be sent to trial. I started to think that maybe they really believe these people are spies."
Khalil was not alone in his reaction.
Several analysts said they were surprised the Egyptians chose to provoke the United States at such a critical juncture in their revolutionary journey; to bite the proverbial hand that feeds them.
What makes this crisis even tougher is that there are no easy solutions to stave off tensions.
The Egyptians say the pro-democracy organizations had received illegal foreign financing and were operating without a proper license. But some of the groups had been tacitly operating for some time in Egypt without permission, even under former leader Hosni Mubarak, who was pushed from office in the initial wave of the Arab Spring protests last year.
State Department spokeswoman Victoria Nuland said the groups targeted did not fund candidates or parties and there was nothing new in their activities.
She said Wednesday that Egypt had sent the formal charging document that outlines the case against the foreign staff. It's more than 100 pages in Arabic and is being translated and reviewed.
Despite the charges, the United States does not consider the case a judicial one, Nuland said.
"This is an issue between the two governments," she said, about the "appropriate role" of foreign organizations in supporting democracy.
Washington viewed Egypt's actions as a crackdown on democracy and threatened to cut off more than $1.3 billion in military aid that was conditioned on Egypt's progress in transitioning to democracy.
Top officials including Secretary of State Hillary Clinton and Defense Secretary Leon Panetta lashed out. And 41 members of Congress urged the administration to withhold further aid to Egypt until authorities allow the offices of the targeted organizations re-open.
"We have underscored how serious a problem these actions are. We have said clearly that these actions could have consequences for our relationship, including regarding our assistance programs," White House spokesman Jay Carney told reporters.
The drama continued as an Egyptian military delegation abruptly canceled meetings Monday with senior U.S. lawmakers and returned home to Cairo.
Sen. John McCain, the ranking Republican on the Senate Armed Services Committee, did not give a reason why the Egyptians backed out, but it wasn't hard to guess.
Wednesday, Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, announced plans to travel to Cairo later this week.
Top aides billed it as a "long planned" visit with his military counterparts.
Col. David Lapan, Dempsey's spokesman, told CNN that Dempsey will not present any ultimatums to the Egyptian military but will remind them of the aid that is at risk.
"He will say you have choices and there are consequences to those choices," Lapan said.
Marina Ottaway, a senior associate at the Middle East Program of the Carnegie Endowment for International Peace, said both Egypt and the United States find themselves in prickly positions.
"What is happening now is that both sides have painted themselves in a corner and they don't have an easy way to get out," she said.
The Egyptians have now made a legal case and the Americans will find it difficult to tell them to interfere with the work of the judiciary when they are trying to push democracy, Ottaway said.
"Americans cannot preach to us night and day about the need to abide by the rule of law and then ask us to break the law to serve their interests," one Egyptian official told the Al-Ahram newspaper.
The United States entree into Egypt is through its military leadership -- Washington has no relationship with the political leaders of the Muslim Brotherhood, which has a majority in Egypt's parliament. So it cannot afford to simply cut off Egypt, Ottaway said.
At the same time, Egypt must find a way to expedite legitimate trials and release the Americans to protect its relationship with Washington.
Ottaway said the military often blames foreign forces of having a hidden hand in anti-government protests.
"This is what the military is doing," she said. "Unfortunately, they are not blaming some nebulous group. It's a big mess."
The crisis may also have been fueled in part by a great sense of nationalism on the government's part, said Isobel Coleman, a senior fellow at the Council for Foreign Relations.
"It's better in the short term to be seen as standing up to the Americans," she said.
In recent days, protesters have returned to Cairo's Tahrir Square, demanding an end to military rule. Some of those protests, in the wake of soccer riots that killed 79 people, have turned deadly.
"As the situation continues to be very unsettled in Egypt, the powers that be will look for a scapegoat," Coleman said. "Blame your problems on outside powers. That's how it has been throughout history."
Accusing activists of receiving foreign funds is not new, either.
Under Mubarak, dissident Saad Eddin Ibrahim was accused of using European Union money for election monitoring. He was tried twice before a higher court dismissed the case.
Khalil, who covered Ibrahim's trial, said he believes the Egyptian courts will back down on the foreigners.
"I think the Egyptians understand the depth of the hornet's nest," he said.
But what Khalil fears most are the consequences for a half-dozen Egyptian pro-democracy groups that have also been accused of receiving foreign money. They are not the ones in the spotlight, he said. But they are the ones who will feel the wrath of authorities the most.
CNN's Barbara Starr and Ted Barrett contributed to this report.