By Yara Bayoumy
CAIRO (Reuters) - U.S. Secretary of State Rex Tillerson said on Monday Washington stood by Egypt in its fight against Islamist militants as he began a Middle East tour at a time of increasingly complex local and proxy conflicts.
Tillerson stressed a need for free and fair elections in all countries ahead of a March presidential vote in Egypt, but withheld direct comment on what critics say is a crackdown on some rivals seeking to challenge President Abdel Fattah al-Sisi at the polls.
The United States has become more embroiled, diplomatically and militarily, in regional conflicts since President Donald Trump took office more than a year ago.
It stepped up support for Kurdish-led forces in Syria before its NATO ally Turkey began a military operation against them last month, and has sided firmly with Israel in recognizing Jerusalem as its capital, angering Palestinians and drawing rebukes from Arab leaders.
The United States has also forged closer ties with Saudi Arabia and other Gulf Arab states while taking a tougher line against Iran since Trump took office.
Tillerson and his Egyptian counterpart Sameh Shoukry delivered a message on Monday that relations remained strong with one of the key U.S. Arab allies.
"We agreed we would continue our close cooperation on counterterrorism measures," Tillerson said.
"Egypt deals with the threats of ISIS themselves and are dealing with it certainly currently in the Sinai.
"The U.S. commitment in continuing to support Egypt in its fight against terrorism and bringing security for the Egyptian people is steadfast and will continue," he said.
Egypt last week launched a large military operation against Islamist militants, focused on defeating Islamic State in the Sinai peninsula.
Tillerson arrived in Egypt, one of the main recipients of Washington's foreign aid, at the start of a regional tour amid heightened tension between Israel, Syria and Damascus's ally Iran after an Israeli F-16 aircraft was shot down, crashing in northern Israel.
Shoukry said Cairo and Washington had agreed to hold strategic dialogue talks at the level of foreign ministers later this year.
Tillerson also met Sisi before leaving the country. He was to attend a conference on Iraqi reconstruction in Kuwait.
Sisi is running against a single competitor in the March 26-28 poll after more challenging opponents pulled out, some citing intimidation of supporters and other tactics designed to give the incumbent an easy win.
Sisi, a former military chief, gave the armed forces three months to clear Sinai of militants after more than 300 people were killed by gunmen at a mosque in Sinai in November. The Egyptian army said at least 28 suspected militants have died in clashes since the operation began on Friday.
Egypt receives $1.3 billion annually from the United States.
Last year, Washington withdrew some financial aid to Egypt saying it had failed to make progress on respecting human rights and democracy.
Asked about concerns over the election, Tillerson said the United States supported a credible, transparent vote in Egypt, Libya and elsewhere.
"We have always advocated for free and fair elections, transparent elections not just in Egypt but in any country," Tillerson said.
Egypt says it will conduct free and fair elections, but opponents of Sisi have criticized what they say is a government-led crackdown on challengers.
Later a senior State Department official said some of the issues "pending" in the U.S.-Egyptian relationship included a law regulating nongovernmental organizations, concerns on civil society and "democratic process baskets." The issue of American nationals detained in Egypt was also raised.
The official described the meetings with the Egyptians as "a positive, substantive engagement on both sides. And from that we have to hope that similarly, there will be positive, substantive movement."
Tillerson said the United States was also keen to continue supporting Egypt in its economic recovery, after the country implemented tough economic reforms tied to a $12 billion International Monetary Fund loan.
Shoukry said Egypt stressed the need for a peaceful settlement of the Israeli-Palestinian conflict.
"We discussed how to reach a solution for the Palestinian-Israeli conflict on the basis of a two-state solution and the importance of maintaining U.S. efforts to reach this final settlement," Shoukry said.
Tillerson said Washington remained committed to working for peace between Israel and the Palestinians, adding that Trump's decision on Jerusalem in December did not set final boundaries for the city and that Washington believes it has an "important role to play to bring a resolution" to the crisis.
The decision to recognize Jerusalem as Israel's capital led to clashes in the West Bank, was opposed by Arab and EU countries, and reversed decades of U.S. policy.
(Reporting by Yara Bayoumy; Additional reporting by Mostafa Hashem,; Writing by Sami Aboudi, John Davison; Editing by Toby Chopra, Alison Williams, William Maclean and Jonathan Oatis)