Updated

The United States warned Thursday of potential damage to U.S.-Egyptian relations unless President Hosni Mubarak's government relaxes its hard line against a defeated presidential candidate.

The Bush administration had hoped that Egypt, a major political ally and recipient of U.S. aid, would be a cornerstone of the U.S. drive to democratize the Middle East. It welcomed Mubarak's decision this year to amend Egypt's constitution to let opposition candidates run for president.

But Egypt's conviction of a defeated candidate, Ayman Nour, on forgery charges has produced biting criticism from U.S. officials.

"I think that this case as well as the Egyptian government's broader performance on democratic reform is going to figure significantly in the bilateral (U.S.-Egyptian) relationship," State Department spokesman Adam Ereli said Thursday. During a briefing he repeatedly made reference to America's relationship with Egypt in discussing Nour's treatment.

"The fact of the matter is, the case of Ayman Nour, not only on its own merits but also as a bellwether of commitment to political pluralism and openness and respect for the rule of law, has been of critical importance to the United States for at least the last year since his first arrest," said Ereli.

Nour was arrested last January and released in March apparently because of U.S. pressure.

He quickly announced he would take Mubarak at his word and oppose him in the election. Then, new charges were filed in May, and he was arrested again in early December.

Last Saturday, Nour was sentenced to five years in prison after a court in Cairo convicted him of ordering forged signatures to be added to petitions that put his name on September's ballot. He began a hunger strike two weeks before his trial to protest his treatment and was hauled out of a hospital bed to the courtroom, showing signs of the lack of food.

"Clearly, how they handle this individual case, how they handle more broadly speaking the process of political reform and the process of openness and the commitment to transparency and the rule of law, is of significance to the bilateral relationship," said Ereli.

Some critics of Egypt's handling of the Nour case have urged the Bush administration to consider cutting back the $1.8 billion in annual U.S. military and economic aid that goes to Egypt. No country receives more U.S. aid except Israel and, since Saddam Hussein's overthrow, Iraq.

Ereli refused to speculate Thursday whether that would happen. But he issued a warning.

"You've heard from members of Congress their distress at the developments in Egypt," said Ereli, alluding to legislators who approve foreign aid spending. "If I were an Egyptian, or an Egyptian government official, I'd be concerned at the kind of reaction that these latest actions will get ... regarding the (U.S-Egyptian) relationship."

Within hours of Saturday's verdict, White House spokesman Scott McClellan demanded that Nour be released "in the spirit" of Egypt's "professed desire for increased political openness and dialogue ...and out of humanitarian concern."

September's presidential elections where Nour got 8 percent of the vote and Mubarak received most of the rest, passed in relative peace.

Then came parliamentary elections in November and December where violence was widespread. Clashes often resulted when police and supporters of Mubarak's National Democratic Party blocked opposition voters from the polls.