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U.S. President Barack Obama talks at the National Defense University in WashingtonUS President Barack Obama said Thursday his government “strongly condemns” violence in Egypt, and he is canceling U.S.-Egyptian military exercises that had been scheduled for next month.

Speaking from his vacation home on Martha’s Vineyard, Mass., Obama did not suspend any other form of aid to Egypt; he said continued U.S. “engagement” with the military government in Cairo will help it transition back to democracy.

“But while we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back,” Obama said.

The president also did not describe the military’s removal of President Mohammed Morsi last month as “a coup,” a declaration that would require ending U.S. aid to Egypt that adds up to about $1.3 billion a year.

The U.S. and Egypt had joint military maneuvers known as “Bright Star” scheduled for mid-September. Obama said they cannot go on given the violence that has claimed at least 500 lives and injured thousands more.

In the past, Bright Star has been held every two years, though the 2011 exercises were canceled because of that year’s removal of President Hosni Mubarak.

Bright Star exercises began in 1980, a product of the Camp David Peace Accords. The last time it was held, in 2009, some 5,000 U.S. troops took part, along with military units from Egypt, France, Germany, Greece, Italy, Jordan, Kuwait, Pakistan, Turkey and Great Britain.

Defense Secretary Chuck Hagel said he spoke with his Egyptian counterpart about the canceled maneuvers, and added that “the United States has made it clear that the Egyptian government must refrain from violence, respect freedom of assembly, and move toward an inclusive political transition.”

Obama, who met with his national security team on Thursday, said he has asked aides to assess “further steps we may take” if Egypt’s interim government does not honor pledges to conduct new elections as soon as possible and restore a democratic government.

STORY: Death toll rises in crackdown

Some lawmakers are urging the Obama administration to cut off aid to Egypt now.

“President Obama says he deplores violence in Egypt, but the foreign aid continues to help pay for it,” tweeted Sen. Rand Paul, R-Ky., a potential presidential candidate in 2016.

The president spoke a day after Egypt’s interim government used force to clear encampments created by backers of the ousted Morsi. The action triggered violent clashes throughout the country. The interim government has declared a nationwide state of emergency and a nighttime curfew.

The two sides in Egypt are offering vastly different estimates of the death toll. The government says more than 500 have died in the violence; the Muslim Brotherhood, the organization that includes Morsi, puts the death count at more than 2,500.

In his brief remarks to reporters, Obama made clear he does not want to cut ties to Egypt, saying its relationship with the United States “goes back decades.” The U.S. has long seen Egypt as a bulwark of stability in the Middle East, and treasures its peace treaty with Israel, he said.

Obama applauded the desire of the Egyptian people for freedom and democracy after the fall of Mubarak and said he has long known that change would not come “quickly or easily.” The U.S. also appreciates “the complexity” of the current situation in Egypt, he said.

The Morsi government, while democratically elected, “was not inclusive and did not respect the views of all Egyptians,” Obama said, noting that millions of citizens supported his removal.

While the interim military government promised a restoration of democracy, Obama said that it has now taken “a more dangerous path” that includes “arbitrary arrests, a broad crackdown on Mr. Morsi’s associations and supporters, and now, tragically, violence that’s taken the lives of hundreds of people and wounded thousands more.”

Members of both the interim government and Morsi supporters accused the Obama administration of supporting the other side, but Obama said the United States isn’t taking any side.

“We want a peaceful, democratic, prosperous Egypt,” Obama said. “That’s our interest. But to achieve that, the Egyptians are going to have to do the work.”

After his speech, Obama played golf at Mink Meadows Golf Club. He is scheduled to return from his week-long vacation on Martha’s Vineyard on Sunday.

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