NEW YORK / CAIRO / BEIRUT: Egypt needs to ensure the security of foreign diplomats or risk losing the $1.3 billion in aid it receives each year from the U.S., Republican presidential candidate Mitt Romney said Friday.

After Islamist protesters stormed the U.S. Embassy in Cairo this week, Romney told a fundraising breakfast in New York that the United States should take a tougher line with Egypt.

“I think for instance in Egypt we should make it very clear to maintain a relationship, a friendship, an alliance and financial support with the United States, Egypt needs to understand it must honor its peace treaty with Israel.

“It must also protect the rights of the minorities in their nation. And finally among other things it must also protect the embassies of our nation and other nations,” he said.

Egyptians angry at a film they said was blasphemous to Islam clashed Friday in Cairo for a third day with police who blocked the way to the U.S. Embassy, where demonstrators climbed the walls and tore down the American flag earlier this week.

“The American people are disturbed and reeling with the news around the world,” Romney told the fundraising event.

The attacks on the embassy and Egyptian President Mohammad Mursi’s slow response in condemning the violence have strained relations between the former allies Egypt and the United States.

U.S. President Barack Obama pointedly told the Spanish-language network Telemundo Wednesday that Egypt’s Islamist-led government should not be considered a U.S. ally, “but we don’t consider them an enemy.”

Obama later spoke to Mursi and delivered a blunt message that Egypt must cooperate in protecting American diplomatic facilities.

Washington pumps $1.3 billion in military aid to Cairo every year and is reported to be weighing a deal to relieve $1 billion worth of debt.

Egypt’s 1979 peace treaty with U.S. ally Israel also forms the cornerstone of U.S. interests in the Middle East.

Mursi appeared on state TV Friday appealing to Muslims to protect embassies, in an apparent move to smooth over the growing rift.

“It is required by our religion to protect our guests and their homes and places of work,” Mursi said in an address lasting nearly seven minutes.

“So I call on all to consider this, consider the law, and not attack embassies, consulates, diplomatic missions or Egyptian property that is private or public.”

He denounced the killing of the American ambassador in Libya, who died in an attack Tuesday on the U.S. consulate in the Libyan city of Benghazi along with three other Americans.

Egypt’s Muslim Brotherhood, on whose party ticket Mursi came to power in August, also said the U.S. was not responsible for an anti-Islam film that sparked the violent protests.

In a letter to the New York Times, the Brotherhood’s deputy leader Khairat al-Shater said Egyptians have the right to protest the offensive Internet video but that the storming of the U.S. Embassy in Cairo was “illegal.”

“Despite our resentment of the continued appearance of productions like the anti-Muslim film that led to the current violence, we do not hold the American government or its citizens responsible for acts of the few that abuse the laws protecting freedom of expression,” he wrote in the letter.

“In a new democratic Egypt, Egyptians earned the right to voice their anger over such issues, and they expect their government to uphold and protect their right to do so. However, they should do so peacefully and within the bounds of the law.”

Shater also expressed “condolences to the American people” over the killing of the U.S. ambassador.