Egypt has turned down a request from eight US-based civil society groups for licences to operate in the country. This came after a crackdown on their activities, which in turn sparked the first diplomatic spat between Cairo and Washington since the ousting of former president  Hosni Mubarak. The Egyptian state news agency (MENA) reported Monday, that the Insurance and Social Affairs Ministry rejected the applications because it believed the groups\' activities violated state sovereignty. It also said that requests from the Carter Center for Human Rights, which was set up by former US president Jimmy Carter, the Christian group Coptic Orphans, Seeds of Peace and other groups had been rejected. Lawyer for one of the rejected groups, Negad al-Borai said: “I don’t understand how a charity group like the Coptic Orphans, which works with over 35 churches in Egypt to provide medical and social aid, was rejected”. Sanne van den Bergh, who is a field office director for the Carter Center in Egypt, said that the group had not been formally notified of the decision to deny it a licence, “but we are aware of the media reports about it and we are looking into them.” Surprisingly, the Egyptian decision came on the same day that Interpol refused a request by Egypt to issue worldwide arrest warrants for 15 employees of several U- based non-governmental organisations (NGOs)  which operate in Egypt. Interpol’s statement stated that the requests for the arrest warrants for the 15, of which 12 are American, was not in line with its rules that forbid “political, military, religious or racial” interventions. During Mubarak\'s tenure, foreign-funded democracy and human rights groups were allowed to operate in Egypt, but were kept in legal limbo by the government, which repeatedly turned down their applications for licences. However, under the military rulers who took over after Mubarak’s fall over a year ago, the authorities have pursued an even tougher line, raiding NGO offices and pressing criminal charges against a number of Egyptian and foreign NGOs. In response, Washington has threatened to withdraw $1.3 billion in military aid until an Egyptian judge lifts a travel ban on several American democracy activists who were detained last month, and to allow them to leave the country and avoid possible imprisonment. However just after the US announced it was resuming aid to Egypt in March, Cairo asked Interpol to issue “red notices” for 15 other NGO workers who were not in Egypt when the charges against the organisations were made. American Charles Dunne, one of the 15, told Reuters news agency in Washington Monday, that he was grateful for the US government’s efforts to get Interpol to quash the Egyptian request for global arrest warrants. However he did note that the criminal case against the NGOs had not been dropped in Egypt. Dunne told Reuters that: “Everyone is still under indictment and the case is proceeding. The Egyptians are doing everything they can to escalate this and the confrontation with civil society more broadly”. Dunne is a former US diplomat, who was based in Cairo from 1999-2002. He is at present the Middle East director for Freedom House, which advocates for democracy and human rights worldwide. Interpol said in its statement that twelve of the 15 whose arrest was sought by Egypt were American, two were Lebanese and one was Jordanian. In late December, Egyptian police raided the offices of Freedom House and other pro-democracy groups. Prosecutors later charged 43 people including 16 Americans, on charges of working for organisations that received illegal foreign funding. One of those charged was the son of US Transportation Secretary Ray LaHood. Tensions have since eased, but human rights campaigners say they fear the Egyptian decision announced Monday to deny them licences, may be a signal for a new crackdown on their activities. Hafez Abu Saeda, the head of the Egyptian Organisation for Human Rights said that: “This decision is moving illogically and in opposition to the path of history as the entire world is magnifying the importance of civil society”. He added that: “The government insists on stifling civil work in Egypt.” The military rulers, who took power after Mubarak\'s ouster, are expected to hand over power to the winner of the presidential elections at the end of May.