WASHINGTON/NEW YORK – US President Barack Obama notified the Egyptian military by phone on Thursday that “traditional cooperation cannot continue as usual” between the two nations so long as civilian demonstrators are being shot and killed in the streets of Egypt.Speaking while on vacation in Martha’s Vineyard, Massachusetts, Obama lamented that Egypt’s military has chosen to walk down a “dangerous path,” as the death toll climbed past 550 and thousands more were reported wounded in two days of bloodshed. “We deplore violence against civilians,” he said. “We oppose the pursuit of martial law.”Canceling Operation Bright Star, a biennial military exercise between the US and Egypt in Sinai that began in 1980, the president also directed his national security team to reassess other aspects of the relationship between the two nations.Obama spoke as the military crackdown across Egypt continued against supporters of ousted president Mohamed Morsi. The assault has taken the lives of over 500 civilians and has injured thousands more as the violence has spread nationwide.The president held a conference call from Massachusetts with his secretaries of state, defense and other top national security figures, during which he decided to cancel the exercise and directed the team to examine other possible contingencies.Obama canceled Bright Star in 2011 as well, when the catalyzing Egyptian revolution overthrew longtime leader Hosni Mubarak.“We don’t take sides with any particular party or political figure,” Obama said. “We appreciate the complexity of the situation.”Obama said that Morsi’s government “was not inclusive,” though democratically elected. He noted that the US relationship with Egypt goes back decades and that the largest Arab nation represents a “cornerstone for peace in the Middle East.”The president refrained from directly addressing US aid to Egypt, which amounts to roughly $1.4 billion annually.Most of those dollars are in turn spent on defense contracts with American firms.Saudi Arabia, the United Arab Emirates and other Sunni-ruled states in the Middle East have increased aid to the military in recent months, dwarfing the American package by over $10b.State Department spokeswoman Jen Psaki said on Thursday that nobody in the government thinks that the cancellation of Bright Star alone will change the situation on the ground, and said the US “will continue to assess our aid in all forms.”The US was “outraged” by attacks on Coptic Christians and government facilities by pro-Morsi demonstrators, Psaki said, calling on both sides not to disrupt “an already fragile atmosphere.”“Those acting peacefully should not be labeled terrorists,” Psaki added.Reacting to the deaths of four Egyptian soldiers who were killed in Sinai by terrorists, Psaki referred to the desert as an “area of concern” but said the terrorist groups were “loosely knit.” Roughly 700 US soldiers are positioned in Sinai.On Wednesday, a visibly frustrated Secretary Kerry warned Egypt to end its state of emergency as soon as possible and called the violence “deplorable.” A peaceful transition to civilian rule will be “much, much harder” to achieve as the casualty count climbs, Kerry said, noting that the military and interim government held the “preponderance of power” in the conflict.“I believe they know full well what a constructive process would look like,” he said. “The state of emergency should end as soon as possible.”Morsi protesters were digging in on Thursday, vowing to disobey the army so long as the former president remains in custody and out of power.As state media reported the death toll had topped 525, the United Nations High Commissioner for Human Rights Navi Pillay called for an independent investigation into the killings.“There must be an independent, impartial, effective and credible investigation of the conduct of the security forces. Anyone found guilty of wrongdoing should be held to account,” Pillay said in a statement issued in Geneva.Pillay’s office also acknowledged the conflicting reports about how many Egyptians had died. While the current government had announced 525 dead, the recently ousted Muslim Brotherhood said the number was closer to 2,000.Either way, Pillay, said, the number of people dead “points to an excessive, even extreme use of force against demonstrators.”She urged security forces to “act with full respect for human rights, including the rights to free speech and peaceful assembly,” and the demonstrators – some of whom were accused of being heavily armed – to “ensure that their gatherings remain peaceful.”Meanwhile, the State Department on Thursday warned US citizens to defer travel to Egypt and US citizens living in Egypt to depart immediately, because of the continuing political and social unrest.