Egypt is one of the more economically deprived countries in the world. Societal stress is a major challenge. Few believe that Egypt will escape the poverty that has for so long oppressed it. For all its challenges, Egypt is of strategic importance to the United States, because of its leadership position in the Arab world. It would be extremely difficult for Washington to safeguard its interests in the Middle East without support from Cairo. Recently, Egypt has been hit with an outbreak of religious strife that poses a threat to the rule of President Husni Mubarak. This study looks at the unrest, identifies the forces behind it, and prescribes steps that can be taken to alleviate the situation.