In this instance, nothing. It was handled about as well as it could be, from the US standpoint. Then Sadat was assassinated precisely because of the peace treaty, and Mubarak inherited leadership. Obviously we wanted the peace treaty to hold and things to continue to develop in the direction they seemed to be going.
That's my point. It isn't that US decided to sacrifice the well being of people. It has limited options to choose from , and it also wants to advance its own interests, just like everybody else.
Mubarak turned out to be nothing more than a status-quo strongman, interested only in enriching himself at the expense of his country, and in changing nothing else. Certainly not in altering the Egyptian political landscape, setting up legal and peaceful means of succession, etc. We did absolutely nothing to try to influence that stasis. In fact, we pretended not to see it.
That's the parallel with Shah Reza Pahlavi in Iran. I'm not trying to say that the uprising in Egypt has precise parallels with the Khomeini revolution, but the unwillingness of the U.S. to attempt to use influence to nudge things in a positive direction before the uprisings most certainly was very similar. We have to hope the outcome of things will differ. But I fear we now have significantly less influence and leverage in Egypt than we once did.
Well, I sorta not entirely agree. Certainly, US could do more, but US did try pushing Mubarak in private, and Bush tried to do it publicly, too (read the interview I linked in the other thread where the guy talks about what was happening in Iran). But again, US does have leverage, and that's why pro-US regimes are usually far less repressive than the anti-US ones, but this leverage is limited. As you stated in the beginning and in the end of your post, what is US going to do? Invade? Withdraw support and push the client state into the enemy camp? US is not the only player, after all. And it does have interests, which include calm and stability in the region, which in turn, benefit the people to an extent, too.
My question about what should Israel do was rhetorical, mainly to make the point that, right now, the U.S. has little more in the way of options than Israel does. We sure as hell ain't going to invade Egypt and hope for a sprouting of Jeffersonian democracy, the way we have done in . . .
Well, US options from the get go were limited, I fully agree (though they were more diverse than Israel's). I don't have much problem with US responses. Onlly insofar that they were far too quick to invite the MB into the process, were somewhat inconsistent (thus transmitting amateurism), and were far too quick to dump the regime (not just Mubarak). This has bigger implications. It managed to make the Saudis to publicly break with US and to say that they will bankroll Mubarak if US withdraws aid. It also has implications for the regional rulers as to whether they can depend on US support.
EDIT: The problem is also that US is fast running out of dependable allies in the region, while the list of enemies grows. If this continues, US will lose most of its influence in the region. And while some people might like that, I doubt it would make the tegion a better place