CAIRO>> Ignoring a stern U.S. threat, Egypt on Sunday referred 43 NGO workers, including 19 Americans, to trial before a criminal court for allegedly using illegal foreign funds to foment unrest.

The decision marked a sharp escalation of the dispute between Cairo and Washington over Egypt’s crackdown on U.S.-funded groups promoting democracy and human rights. The two countries have been close allies for more than three decades, but the campaign against the organizations has angered Washington, and jeopardized the $1.5 billion in aid Egypt is set to receive from the U.S. this year.

On Saturday, U.S. Secretary of State Hillary Rodham Clinton warned Egypt’s foreign minister that failure to resolve the dispute may lead to the loss of American aid. The Egyptian minister, Mohammed Amr, responded Sunday by saying the government cannot interfere in the work of the judiciary.

"We are doing our best to contain this but … we cannot actually exercise any influence on the investigating judges right now when it comes to the investigation," Amr told reporters at a security conference in Munich, Germany.

Among the Americans sent to trial is Sam LaHood, the head of the Egypt office of the Washington-based International Republican Institute and the son of U.S. Transportation Secretary Ray LaHood. Five Serbs, two Germans and three non-Egyptian Arab nationals are also among those referred to trial.

All 43 have been banned from leaving the country. A date has yet to be set for the start of the trial.

The Egyptian investigation into the work of NGOs in the country is closely linked to the political turmoil that has engulfed the nation since the ouster nearly a year ago of Hosni Mubarak, a close U.S. ally who ruled Egypt for nearly 30 years. The generals who took power after Mubarak’s fall have accused "foreign hands" of being behind protests against their rule and frequently depict the protesters as receiving funds from abroad in a plot to destabilize the country.

Those allegations have cost the youth activists that spearheaded Mubarak’s ouster support among a wider public that is sensitive to allegations of foreign meddling and which sees a conspiracy to destabilize Egypt in nearly every move by a foreign nation.

But Sunday’s decision to refer the 43 to trial raises questions about the Egyptian military’s motive to allow the issue to escalate so much that the valuable $1.3 billion it gets annually be placed in jeopardy. Washington also is set to give Egypt $250 million in economic aid this year.

The U.S. assistance has allowed the Egyptian military to replace its relatively antiquated Soviet-era weaponry with modern and sophisticated arms, ranging from fighter-bombers and transport aircraft to tanks and personnel carriers. The aid is closely but informally linked to Egypt’s continued adherence to its 1979 peace treaty with Israel, Washington’s closest Middle East ally.

Already, Egyptian authorities are preventing at least six Americans — including LaHood — and four Europeans from leaving the country, citing a probe opened last month when heavily armed security forces raided the offices of 17 pro-democracy and rights groups. Egyptian officials have defended the raid as part of a legitimate investigation into the groups’ work and funding.

Also Sunday, security officials said Mubarak, 83, would shortly be moved to a prison for the first time since his arrest last April. Mubarak has since his arrest been kept in custody in a hospital at the Red Sea resort of Sharm el-Sheikh and later at an army’s medical facility east of Cairo.

They said Interior Minister Mohammed Ibrahim pledged in a meeting on Sunday to upgrade the medical facility in Tora prison south of Cairo in "record time," but did not set a date for the move. Mubarak is on trial on charges of complicity in the killing of hundreds of protesters during the 18-day uprising that forced him to step down.

The officials also said that around 50 former regime insiders held at Tora would be dispersed to five different jails in the greater Cairo area within the next 48 hours. They include Mubarak’s two sons, businessman Alaa and one-time heir apparent Gamal, two former prime ministers and the former speakers of parliament’s two chambers.

The decision to move Mubarak and spread the regime officials appeared to be a concession by the military to pro-reform activists who complain that the ruling generals led by Mubarak’s defense minister for 20 years were treating the ousted leader with reverence and turning a blind eye to former regime officials clustered in Tora to use supporters to undermine security.