(Reuters) - Egyptian prosecutors and police raided offices of 17 pro-democracy and human rights groups Thursday - including several funded by the United States - in what rights defenders described as a campaign against them by the military rulers.

The U.S. State Department said the raids were inconsistent with the bilateral cooperation we have had over many years, hinting it could review its $1.3 billion in military aid if they continued. Germany said it would summon Egypt's ambassador.

Rights groups, a driving force behind the protests that toppled President Hosni Mubarak in February, have become increasingly vocal in criticizing the army's heavy-handed tactics in dealing with street unrest and demanding a quicker handover of power to civilians.

The official MENA news agency said the groups had been targeted as part of an investigation into foreign funding of such organizations.

The public prosecutor has searched 17 civil society organizations, local and foreign, as part of the foreign funding case, MENA cited the prosecutor's office as saying. The search is based on evidence showing violation of Egyptian laws including not having permits.

Among groups targeted were the local offices of the U.S.-based International Republican Institute and National Democratic Institute, a security source and employees at the organizations said.

The United States expressed deep concern over the raids and urged Egyptian authorities to immediately halt harassment of non-governmental organization staff.

State Department spokeswoman Victoria Nuland indicated to a news briefing that military aid could be difficult to push through Congress if the situation did not improve.

We do have a number of new reporting and transparency requirements on funding to Egypt that we have to make to Congress, Nuland said. The Egyptian government is well aware of that and it certainly needs to be aware of that in the context of how quickly this issue gets resolved.

Nuland said U.S. officials had been in touch both with Egyptian Prime Minister Kamal al-Ganzouri and with Egypt's ambassador in Washington to underscore Washington's concern.

CRITICISM

Her comments come after stinging criticism from U.S. Secretary of State Hillary Clinton over the systematic degradation of women during protests in Cairo this month in which 17 people were killed, saying it disgraces the state.

Images of troops beating protesters as they lay on the ground brought thousands of Egyptians onto the streets to vent their dismay. The harsh treatment of women protesters attracted particular attention.

Clinton's was some of the strongest language used against Egypt's new rulers by Washington, which has voiced support for the army's plan to steer the country to democracy.

Germany's Foreign Ministry said it would summon Egypt's ambassador in Berlin on Friday after the raid targeted the German-based Konrad Adenauer Foundation, which is close to Chancellor Angela Merkel's Christian Democrats.

The NDI said in an e-mailed statement that the raid took place on its offices in Cairo, Alexandria and Assiut, from where police confiscated equipment and documents.

Cracking down on organizations whose sole purpose is to support the democratic process during Egypt's historic transition sends a disturbing signal, NDI President Kenneth Wollack was quoted as saying.

One person working at NDI, who gave her name as Rawda, said: They are grabbing all the papers and laptops.

A Reuters television reporter who approached the IRI's offices in central Cairo found the doors sealed shut with wax and saw several police vehicles driving away from the area.

The NDI and IRI, which are loosely associated with the U.S. Democratic and Republican political parties and receive U.S. government funding, say they take a neutral political stance, fostering democracy in Egypt by training members of nascent parties in democratic processes.

CAMPAIGN

Other groups that were raided included U.S.-based Freedom House and local groups set up to defend judicial independence, individual freedoms and democracy, according to the Egyptian Organization for Human Rights.

This looks like a campaign against human rights defenders, said prominent Egyptian rights activist Negad al-Borai. He said similar campaigns happened during Mubarak's three-decade rule.

For this to happen after what we call the 'revolution', I am astonished.

Egypt's military has vowed to investigate how pro-democracy and rights organizations are funded and has said repeatedly it will not tolerate foreign interference in the country's affairs.

Some Egyptian rights groups have been at the vanguard of protests demanding that the army, in power since Mubarak was ousted, hand power swiftly to elected civilians.

The ruling generals have pledged to stand aside by mid-2012 but many democracy activists say the military is keen to preserve its privileges and broad business interests.

Egyptian presidential hopeful and former U.N. nuclear watchdog Mohamed ElBaradei said: Human rights organizations are the icon of freedom ... Everyone will be watching closely any illegal attempts to distort them. The revolution will prevail.

(Additional reporting by Yasmine Saleh and Patrick Werr; Christian Ruettger in Berlin; and Andrew Quinn in Washington; Writing by Tom Pfeiffer; Editing by Alison Williams)

Egypt Germany Hillary Clinton Human rights