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 to fund construction of the High Dam. When the Suez War broke out, the United Kingdom, France, and Israel seized the canal and the Sinai, but pressure from the U.S. and the USSR at the United Nations and elsewhere forced them to withdraw. In 1958, the USSR went ahead in providing support for the High Dam project. In the 1950s, archaeologists began raising concerns that several major historical sites, including the famous temple of Abu Simbel were about to be under water. A rescue operation began in 1960 under UNESCO (for details see below under Effects). The Soviets also provided