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
Aswan Dam realized that he could not legitimately portray himself as the leader of pan-Arab nationalism if he could not defend his country militarily against Israel. In addition to his development plans, he looked to quickly modernize his military, and he turned first to the U.S. The American Secretary of State John Foster Dulles and the American President Dwight Eisenhower told Nasser that the U.S. would supply him with weapons only if they were used for defensive purposes and accompanied by American military personnel for supervision and training. Nasser did not accept these conditions, but then he looked to the USSR for