With mass protests now in their 13th day, Clinton said the U.S. is encouraging talks between opposition leaders and Vice President Omar Suleiman aimed at ending the country's political crisis.
But she withheld judgment on the decision by the Muslim Brotherhood to enter into discussions with the embattled government. The fundamentalist group said it would insist that President Hosni Mubarak, an authoritarian leader who's been in power for nearly three decades, step aside immediately.
In an interview with National Public Radio, Clinton said the U.S. has been clear about what it expects as Egypt moves toward a new government.
"The Egyptian people are looking for an orderly transition that can lead to free and fair elections," she said. "That's what the United States has consistently supported. We are putting a lot into making sure the dialogue process that has begun is meaningful and transparent and leads to concrete actions."
The people of Egypt and the leaders of the various opposition groups would "ultimately determine if it is or is not meeting their needs," she said.
The transition should be as inclusive and transparent as possible, Clinton said.
While remaining noncommittal about the Brotherhood's entry into the talks, she said "at least they are now involved in the dialogue."
"We are going to wait and see how this develops," she said.
Clinton's comment suggests the administration would be willing to work with a government that includes the Brotherhood, but only if certain conditions were met.
The group has been outlawed since 1954 and the talks would be the first known discussions between the government and the Brotherhood in years.
In Washington, Sen. John Kerry hailed the Egyptian government's talks with the Brotherhood and other opposition groups as "quite extraordinary."
Speaking Sunday on NBC's "Meet the Press," the chairman of the Foreign Relations Committee urged Mubarak to lay out a timetable for transition and new elections in a second major address to his people.
"He must step aside gracefully and begin the process of transition to a caretaker government," Kerry said. "I believe that is happening right now," but he said what's needed is clarity in the process.
Leading democracy advocate Mohamed ElBaradei criticized the talks as "opaque" and "managed by the military." Also speaking on NBC, he said he had not been invited to them, and he warned that Egyptians still fear "that the government will retrench and come back with a vengeance."
The Egyptian ambassador to the U.S., Sameh Shoukry, insisted that the transition is under way and said "the Egypt of the future will look significantly different than Egypt of the past."
Clinton addressed in her interview the phenomenon of anti-government protests that began in Tunisia and then spread to Egypt and other Arab nations.
"Some leaders listen better than other leaders, but all leaders have to recognize now that the failure to reform, the failure to open up their economies and political systems, is just not an option any longer," she said.
Clinton said the "forces that are at work, particularly because of the advances in communications technology, are not reversible."
The U.S. understands that and wants to "play a constructive role in helping countries move in the direction of more openness and more democracy and participation and market access, the things that we stand for," she said.
Clinton also acknowledged that over the years the U.S. has had close relations with autocratic regimes that are not popular with their people and run counter to American ideas and ideals.
"There is no easy answer to how we pursue what's in America's interests because ultimately my job, the president's job, is to protect the security, the interests of the United States," she said.
"Do we do business with, do we have relations with, do we support governments over the past 50 years that we do not always see eye to eye with? Of course. That's the world in which we live, but our messages are consistent," she said.