July 15 (Bloomberg) -- U.S. Secretary of State Hillary Clinton met with Field Marshal Mohamed Hussein Tantawi, head of Egypt’s military council, to urge a smooth transition to full democratic rule, a day after crowds protested her meeting with President Mohamed Mursi and the rising power of Islamists.

Tensions between Egypt’s new civilian leader and its senior generals, who took interim power after the ouster of former President Hosni Mubarak last year, have risen since Tantawi’s council stripped Mursi of some of his powers and granted itself legislative authority after the court-ordered disbanding of the parliament. Egypt still has no constitution, a new government has yet to be named and the economy is struggling to recover from the uprising against Mubarak.

Since arriving in the country yesterday, Clinton has avoided any direct comment about the military’s power grab and repeatedly stressed that Egypt’s future is for its citizens to decide, not the U.S. A photo of her meeting today with Tantawi showed the two of them seated in plush, gold-hued armchairs, smiling as they chatted.

“I have come to Cairo to reaffirm the strong support of the United States for the Egyptian people and their democratic transition,” she said yesterday. “As you move forward, we will be there with support. Your choices will decide the future of this country.”

Security guards said an estimated 6,000 people crowded the street in front of Clinton’s hotel when she arrived in the capital of the Arab world’s most populous nation. The protesters set off fireworks, flashed lime-green laser lights and chanted as they waved Egyptian flags. One placard said, “Go to hell, Hillary.” Another, reflecting anti-Muslim Brotherhood sentiment, said “You like the Islamists, Hillary? Take them with you.”

Muslim Brotherhood

Secularists and other groups have voiced concern that the priority of Islamists such as Mursi, who comes from the ranks of the Brotherhood, is to advance their own agenda and dominate politics at the expense of the broader national interest. Many say they are worried that the U.S. is lining up alongside the Brotherhood, which was the dominant group in parliament before the assembly was disbanded, and against the military.

Clinton said yesterday that the U.S. would like to see the military return to a “purely national security role.” She also spoke about the need for the Brotherhood and the generals to end their standoff by engaging in talks, and called for “an inclusive and transparent process to draft a new constitution that upholds universal rights and the rule of law, a constitution for all Egyptians.”

‘Dialogue and Compromise’

“It will take dialogue and compromise among all stakeholders and parties to achieve these goals and avoid confrontations that could derail progress toward democracy,” Clinton said yesterday during an appearance with Foreign Minister Mohamed Kamel Amr.

Clinton spent the morning in Cairo today meeting with Christian leaders, Egyptian women and a business for technology entrepreneurs named Flat6Labs. Later today, she goes to Alexandria to formally open a new U.S. consulate, before continuing on to Israel. During her meeting with Mursi, she underscored the value of Egypt’s peace treaty with Israel, saying that in the last 30 years Egyptians have lived free of conflict.

In the meetings with Amr and Mursi, the Secretary of State outlined millions of dollars in economic assistance the U.S. is set to provide Egypt, giving details of a $1 billion package announced last year by President Barack Obama, according to a State Department official who wasn’t authorized to speak on the record and so requested anonymity. The money will be used for short-term funding and for a debt swap that will back job- creation efforts, the official said.

IMF Loan

Clinton also explained the administration’s plans to support the country’s pursuit of financing from groups such as the International Monetary Fund, the official said. Talks with the IMF for a $3.2 billion loan have yet to be concluded.

Clinton discussed a U.S.-Egypt enterprise fund, capitalized at $60 million in its first year, that will invest in small and medium-sized businesses to create jobs. And she announced $250 million in loan guarantees for small businesses and said a U.S. business delegation will make a visit in September to examine investment opportunities.