Egyptian President Arrives for U.S. Visit : Mideast: Hosni Mubarak will seek continued American economic aid to his country as it weathers a crisis of sectarian violence.

Egyptian President Hosni Mubarak, the first Arab leader to meet with President Clinton, visits Washington this week amid increasing turmoil in the Middle East and Egypt’s worst wave of sectarian violence since the 1981 assassination of Mubarak’s predecessor, Anwar Sadat.

Seeking to pave the way for renewed Mideast peace negotiations and bolster support for continued American economic aid to this country, Mubarak arrived Saturday in Washington amid the most serious crisis of his administration, which has been an important U.S. ally in this region and a vital peacemaking link between the Arab world and Israel.

With spiraling violence in the Israeli-occupied West Bank and Gaza Strip, Lebanon and Algeria already on the Middle East agenda, the bulwark that is Egypt is undergoing a rash of attacks by Islamic militants that threaten the country’s most vital economic interests and its 58 million Arab citizens.

At the same time, Mubarak’s government faces mounting criticism from a broad range of the Egyptian public over such issues as corruption, price increases, democratization and human rights.

“We have reached the point of a critical variable: The Establishment itself is not happy with the way the president is dealing with things,” said Gihad Auda, a prominent political analyst and erstwhile supporter of Mubarak’s government. “The president is losing touch with the ruling elite, which has been the basis of support for the regime, and this elite dissension is the first stroke in the beating drum of revolt.

“What we are heading toward is not a revolution,” he said. “It’s chaos, it’s erosion. The state is being eroded.”

Nearly all analysts agree that there is no immediate threat to Mubarak’s government. It is backed by the army; it has a broad political foundation, and public anger is mounting against the Islamic militants. Yet many say that there are increasing signs of trouble.

Topping the list of woes is an almost daily tally of Islamic extremist attacks. The violence has killed 55 people this year, including three foreign tourists and more than two dozen police officers. Bombs have exploded in central Cairo, in the tourist city of Aswan and in one of the burial chambers of the pyramids.

Islamic extremist threats to tourists and foreign investors have caused tourism revenues to plummet by more than $700 million and increased the wariness about new business investment here.

The public has reacted critically not only to authorities’ failure to halt the violence but to the violent crackdown they launched against suspected extremists. In one case, security forces stormed a mosque in Aswan, gunning down worshipers as suspected extremists.

The Egyptian Organization for Human Rights has detailed cases in which police have subjected women and children between ages 8 and 15 to “severe torture” to obtain information on the whereabouts of relatives suspected of extremist activities. More than 28 suspected Islamic militants have been killed during arrests in recent weeks.

“This is creating an equalization in the minds of some of these groups and the police of one violence against the other,” said Tahseen Bashir, a former spokesman for Sadat and an intellectual who is also usually supportive of the regime. Bashir described that development as “very dangerous.”

Another Egyptian intellectual--one of a growing number of writers, academics and business people who accuse the government of isolating itself from political trends in its quest to hold back an Islamic tide--added, “Shooting people in the street will not solve any damn thing.”

Coupled with the Islamic threat is Egypt’s difficult transformation to a market economy, which already has caused price increases and unemployment. And the most difficult step--privatization of the country’s vast, inefficient state industries--lies ahead.

For now, though, economic indicators seem positive. Inflation is down to less than 10%, the currency is stable and Egypt stands to get another 15% debt write-off--if it can move forward with the second phase of an agreement with the International Monetary Fund.

To go forward with long-term economic reform, Egypt sees continued U.S. economic assistance as vital, but aid is now more in doubt than ever before.

The $2.3 billion a year that Egypt gets from Washington in military and economic assistance is second only to that received by Israel, and while the Clinton Administration appears firmly in favor of maintaining that level through 1994, strong pressure exists to reduce the U.S. deficit and find more money to help Russia.

“If you’re looking for money, you go where the money is, and in the U.S. AID program, the money is in Israel and Egypt,” one Western economist said. “The Administration position is, ‘No cut in aid in ’94.’ Nobody knows about ’95. And once you get to the Congress, anything is possible.”

Nagui Ghatrify, an Egyptian Foreign Ministry spokesman, said: “We know sooner or later foreign aid will shrink and maybe vanish. But we care so much about the timing. . . . If we receive less assistance, we will be in a worse economic situation, which will only support some of these (Islamic) groups, which are not in favor of peace and which see that Israel should remain as the enemy.”

Mubarak’s message in the United States will be that his government is fighting a war on terrorism much like that being fought in European capitals, and now in America, with the World Trade Center bombing.

“Egypt is part of a world where many more acts (of subversion) are taking place without affecting stability or industrial progress,” Mubarak told reporters in Bonn, where he began his trip abroad last week. “Egypt is a democratic state that employs democratic methods. Egypt is completely stable.”

Officials point out that Egypt has multiple political parties, a fairly free opposition press and no restrictions on travel abroad for citizens. Most citizens, they say, support strong action on the part of the government to quell Islamic violence. Further they say there are no signs that a broad segment of citizens or elements within the security forces are aligning themselves in opposition to the government.

“What you are seeing now is a fight between police and terrorists. It is not a crackdown on political belief,” said Mohammed Ahmed Abdellah, head of the National Assembly’s foreign affairs committee.

But some analysts are less certain.

“How do you define the stability of the regime? If your question is, is there a threat to the survivability of the regime, the answer is a categorical no,” said Ali Hillal Dessouki, political scientist at Cairo University. “But if you define political stability or instability in a more diffuse way, that you do have emerging threats to the forces of law and order, the answer is yes.”

Egypt has a way of surviving trauma, as its 5,000-year-old Pharaonic monuments attest. The regime itself has been largely in place since the revolution of 1952, amid the crises of four Arab-Israeli wars and two wars in the Persian Gulf.

“The degree of non-change at the top of Egypt is awesome,” Bashir said. “Keep in mind that from 1981 to 1991, the first 10 years of Mubarak, Egypt grew by 14 million people, the total population of all the Palestinians, Jordanians and Israelis put together. And Egypt didn’t go to civil war. . . . So you should not underestimate the ability of the Egyptian body politic to absorb static.”