Aswan Dam allies in the Middle East, including Turkey and Iraq, were irritated and jealous that Egypt, a persistently neutral country, was being offered so much aid. In June 1956, the Soviets offered Nasser $1.12 billion at 2% interest for the construction of the dam. On 19 July the U.S. State Department announced that American financial assistance for the High Dam was "not feasible in present circumstances." On 26 July 1956, with wide Egyptian acclaim, Nasser announced the nationalization of the Suez Canal as well as fair compensation for the former owners. Nasser planned on the revenues generated by the canal helping
United States foreign policy in the Middle East in the country. The involvement that the U.S. would take in Egyptian business and politics in return for aid, Nasser thought "smacked of colonialism." Indeed, as political scholar B.M. Bleckman argued in 1978, "Nasser had ambivalent feelings toward the United States. From 1952 to 1954 he was on close terms with U.S. officials and was viewed in Washington as a promising moderate Arab leader. The conclusion of an arms deal with the USSR in 1955, however, had cooled the relationship between Cairo and Washington considerably, and the Dulles-Eisenhower decision to withdraw the offer to finance the Aswan High Dam in