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Egyptian crisis balloons into crucial test for Obama team Administration could face criticism for failing to avert spreading crisis.

When he assumed office, President Obama inherited two wars, but the sudden upheaval in Egypt poses the biggest new foreign policy challenge of his presidency.

The administration's management of the unfolding crisis in the Middle East will shape perceptions of Obama as a leader, abroad and at home. If events spiral out of control, Obama and his advisers will likely be criticized for failing to head off a potential disaster in a volatile part of the world.

"Who knows where this is going? Should things not hold in Egypt, or should this catch fire in other Middle Eastern states, people really are going to watch how he handles the first major new foreign crisis on his watch," said Ryan C. Crocker, former U.S. ambassador to several Middle Eastern countries and mow dean of the George Bush School of Government and Public Service at Texas A&M University.

Diplomatic veterans like Crocker, and other outside analysts, generally give Obama's team positive marks for handling an exceedingly complex problem. But critics are already making the case that Obama and Secretary of State Hillary Rodham Clinton were slow to react. They say top administration officials issued public statements overly supportive of Egyptian President Hosni Mubarak, even as his regime was encountering a growing surge of popular protest.

"This is a big deal for President Obama," said Martin Indyk, director of the foreign policy program at the Brookings Institution. "It requires very cool judgment to calibrate this in a way that does minimal damage to our interests."

Obama's decision to make remarks late Friday that were seen as supportive of the anti-Mubarak uprising "was the right thing to do. But it's a very risky strategy, because the end result could be that an ally that we depended on to protect American interests and stability in this volatile region will be toppled, and that a very unstable situation in Egypt will then spread across the region, and that can do great damage to our interests," he said.

At the same time, "clinging to Mubarak, when it's clear that he's lost his legitimacy among the Egyptian people and ends up using force and a great deal of bloodshed to retain his power, could produce the very instability we're trying to avoid," said Indyk, who held top State Department posts in the Clinton administration and has served as an outside adviser to George S. Mitchell, Obama's special envoy for Middle East peace.

Egypt has anchored U.S. foreign policy in the Arab world since the 1970s and, under Mubarak, has remained a strong defender of U.S. interests in the region on issues ranging from countering Iran's nuclear aspirations to preventing weapons smuggling from Egypt to Gaza, as recent U.S. cables released by WikiLeaks show.

From the start of his presidency, Obama has sought to defuse anti-Americanism in the Muslim world and end talk of a "clash of civilizations."

In his Cairo speech in 2009, he said the United States supported the aspirations for greater freedom of Arabs. Yet the administration has continued in many ways the policies of past U.S. governments, including support for the region's authoritarian regimes, and polls show the administration's public support among Arabs has declined from the time of his inauguration.

Indeed, some Arab activists say they preferred the more sharp-edged message of President George W. Bush, who pushed a "freedom agenda."

Obama came under sharp criticism in June 2009, for failing to more forcefully back Iranians who took to the street to protest a presidential election they believed was rigged. He later stepped up his public expressions of support for the demonstrators.

The fall of Egypt's government could exacerbate pressures on some neighbors, potentially setting off a tsunami that reshapes the political and security balance throughout the greater Middle East. The rise of a less friendly government in Cairo could set off alarms in Jerusalem and calls for the United States to increase its defense of its closest Middle East ally, Israel. David Schenker, of the Washington Institute for Near East Policy, said the U.S. strategy in the region was to offset Iran's power with its influence in Egypt and Turkey. "And now we don't have Turkey anymore," he said, referring to Turkey's increasing independence from the United States.

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