US Secretary of State John Kerry has made the highest-level American visit to Egypt since President Abdel Fattah el-Sissi took office as Washington presses the former army chief to adopt more moderate policies.
Economic and security problems are undermining Egypt's stability, and Mr Kerry's visit signals an attempt by the Obama administration to thaw a relationship with a long-time Mid East ally that has cooled in recent years during the country's political turmoil.
Over the last year, in particular, the US has watched warily as Cairo has outlawed the Muslim Brotherhood, an Islamist political opposition group that was ousted from power last July.
US officials cite hard-line policies - including the sentencing of hundreds of people to death in trials lasting only a few hours, and the jailing of journalists - in refusing to fund all of the $1.5 billion in military and economic aid that Washington usually sends to Cairo each year.
The US reluctance has fuelled frustration among Egyptians who accuse the Obama administration of favouring the Muslim Brotherhood and starving Cairo of help at a time when the country's economy and security are at risk.
"Obviously, this is a critical moment of transition in Egypt, with enormous challenges," Mr Kerry said before meeting with Foreign Minister Sameh Shoukry.
"There are issues of concern ... but we know how to work at these and I look forward to having that discussion."
Mr Shoukry welcomed Kerry's visit as important for ties between the two governments. "I hope we will have a fruitful discussion here," he said.
Earlier this month, the US quietly agreed to send an estimated $572 million to Egypt in military and security assistance on top of $200 million in economic aid already delivered. But Egypt is still calling for the US to send the rest of its annual $1.5 billion in aid, most of it for the military, which has been suspended until Washington believes Cairo is committed to democracy.
Officials say they have seen some small encouraging signs that Mr el-Sissi is prepared to protect Egyptians' rights. They cite the issuing of tough penalties for sexual assault against women and the freeing a jailed journalist.
But the US remains concerned about the Cairo government's crackdown against the Brotherhood, which Washington considers a political threat to Mr el-Sissi - not a security risk to Egypt.
The government's security crackdown has targeted secularists and Brotherhood supporters who have protested against its heavy-handed policies. Some youth leaders who were at the forefront of the 2001 uprising against former president Hosni Mubarak and who also opposed his successor, Mohammed Morsi, are now languishing behind bars, mostly for violating a law that has restricted any public gatherings.
The US wants Mr el-Sissi to build a more inclusive government, and that largely means lifting the ban on the Brotherhood and allowing it to participate in the political process.
Mr Kerry was scheduled to meet with Mr el-Sissi later on Sunday.
The president was sworn in earlier this month after leading a revolt last summer against former Mr Morsi, a Muslim Brotherhood leader who was the nation's first freely elected leader. Since Mr Morsi's ouster, the Brotherhood has responded with protests that have turned into violent clashes between demonstrators and government security forces.
Egypt is also facing a growing jihadi threat in the Sinai Peninsula, where militants are thriving on a flood of heavy weapons easily smuggled from Libya.
The security problems have contributed to a severe slowing of Egypt's tourism industry that began in early 2011 when a popular uprising overthrew Mr Mubarak, president for three decades.