The Carter Center has closed its Egypt office saying the country is "unlikely to advance a genuine democratic transition."
The organisation criticised in a statement Wednesday Egypt's draft NGO law, saying it would put harsh restrictions on NGO activities and resources in Egypt.
The organisation, whose Egypt office opened in 2011 following the 25 January uprising, also said it would not deploy an observation mission to monitor the country's upcoming parliamentary elections.
"I hope that Egyptian authorities will reverse recent steps that limit the rights of association and assembly and restrict operations of Egyptian civil society groups," former US President Jimmy Carter said.
The organisation expressed fears that the draft NGO law would bring back "more vigorously" restrictions imposed during the rule of toppled autocrat Hosni Mubarak. This, it said, "undermines key rights enshrined in the new constitution ... which grants all citizens the right to form peaceful, non-governmental associations and the right to pursue their activities free of administrative intervention."
NGOs operating in Egypt are on alert after the government announced in July that they would have to officially register under Law 84 issued in 2002 under Mubarak. Critics say the law hampered rights organisations' mobility and freedom under the Mubarak regime.
The ultimatum — initially set at 45 days — expired in September and was rolled back to 10 November amid harsh criticism from local and international rights groups.
NGOs in Egypt have faced heavy security surveillance and have been repeatedly pressured by authorities over decades. Many have also been scrutinised and accused of spying following the 2011 uprising.
In its statement, the Carter Center also noted that numerous Egyptian rights organisations operated as law firms or civil companies in the past as they were unable to get registered as NGOs.
However, according to the new law, "this critical loophole is being closed" and as a result, the organisation says, many NGOs "face closure and possible prosecution of staff," unless approved.
The organisation also criticised Egypt's protest law, issued in November 2013, which gives the police power to approve, cancel, postpone or change a demonstration's time and venue. It also demands to know all the contact information of the participants in a planned protest.
Hundreds, from different political stances, have been arrested under the law amid wide calls for its amendment, most notably through a hunger strike campaign launched in September.
The Carter Center has also described the political atmosphere as "deeply polarised" and said that the government crackdown on the Muslim Brotherhood is "troubling."
Islamist former president Mohamed Morsi, who hails from the Brotherhood, was ousted in July 2013.
The Brotherhood has described the ouster as a "coup" and has taken to the streets since then in protest.
The government banned the Muslim Brotherhood, dissolved its political wing, the Freedom and Justice Party, and put hundreds of its members, including Morsi and Supreme Guide Mohamed Badie, on trial, mainly on charges of inciting violence, murder and espionage.
Attacks on police and army personnel have become frequent, particularly after a forced dispersal of Islamist sit-ins last August that left hundreds dead. The national media has pointed a finger at the Brotherhood for the escalation of attacks. The group has repeatedly said it is committed to peaceful opposition.
The Sinai-based militant jihadist group Ansar Beit Al-Maqdis has claimed responsibility for some of the attacks.