The United States cancelled a joint military exercise with Egypt Thursday, as Defense Secretary Chuck Hagel sounded alarms about the two nations’ military ties.

President Barack Obama said Thursday that the United States “strongly condemns” the interim Egyptian government’s bloody crackdown on protesters loyal to outset President Mohammed Morsi, more than 500 of whom died on Wednesday. In an address from Martha’s Vineyard, Obama said “while we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back. “

“As a result, this morning we notified the Egyptian government that we are canceling our biannual joint military exercise which was scheduled for next month,” Obama said. “Going forward I’ve asked my national-security team to assess the implications of the actions taken by the interim government and further steps that we may take as necessary with respect to the U.S.-Egyptian relationship.”

The biennial Bright Star joint military exercises, which started in 1980, include U.S. ships and aircraft. Pentagon officials had maintained the war game would proceed next month, until the news on Wednesday that more than 500 protesters were killed in Egypt. The Pentagon has already taken action amid the unrest in Egypt, including suspending delivery of F-16 fighter jets to the African nation.

Hagel further told Egyptian Minister of Defense Al-Sisi on Thursday that the two nations’ defense ties are tenuous.

“The Department of Defense will continue to maintain a military relationship with Egypt, but I made it clear that the violence and inadequate steps towards reconciliation are putting important elements of our longstanding defense cooperation at risk,” Hagel said in a statement.

He said he called Al-Sisi specifically to discuss the “U.S.- Egypt defense relationship.”

“Since the recent crisis began, the United States has made it clear that the Egyptian government must refrain from violence, respect freedom of assembly, and move toward an inclusive political transition,” Hagel said. “Recent developments, including the violence that has resulted in hundreds of deaths across the country, have undermined those principles.” He added that U.S. officials are “ready to work with all parties to help achieve a peaceful, inclusive way forward.”

Multiple lawmakers have called for the White House to freeze aid to Egypt.

The Senate Appropriations State Department and Foreign Operations subcommittee, for its part, calls for putting conditions on monies for Egypt within its version of the fiscal year 2014 State Department appropriations bill.

“We want an Egypt that moves toward democracy and not toward dictatorship,” subcommittee Chairman Patrick Leahy (D-Vt.) said Thursday in a statement. “The legislation reported by my committee last month ties our aid to the restoration of a democratically elected government in Egypt, in a three-stage process. In the meantime, while suspending joint military exercises as the president has done is an important step, our law is clear: aid to the Egyptian military should cease unless they restore democracy.”