Rice's remarks were to some 700 invited government officials, academics and other guests at the American University in Cairo. The setting is notable, both because Egypt plans multiparty elections in the fall and because the administration of President Bush has made no secret of its dissatisfaction with political progress and the treatment of opposition figures by the government of Egyptian President Hosni Mubarak.
"For 60 years, my country, the United States, pursued stability at the expense of democracy in this region, here in the Middle East, and we achieved neither," Rice said. "Now, we are taking a different course. We are supporting the democratic aspirations of all people."
In other Mideast developments:
"Throughout the Middle East the fear of free of choices can no longer justify the denial of liberty. It is time to abandon the excuses that are made to avoid the hard work of democracy," Rice said.
Rice took the governments of Saudi Arabia and Egypt, both close U.S. allies, to task for cracking down on dissent.
In Saudi Arabia, she noted, three people are currently in jail for petitioning the government.
"That should not be a crime in any country," she said.
She lauded Mubarak for calling for elections but said she was concerned for the future of Egypt's reforms because of the violence that has faced "peaceful supporters of democracy."
"President Mubarak has unlocked the door for change. Now, the Egyptian government must put its faith in its own people," Rice said. "The Egyptian government must fulfill the promise it has made to its people, and to the entire world, by giving its citizens the freedom to choose."
Rice also offered a brief checklist for democracy to both supporters and opponents of established governments.
Rice also delivered a blunt slap at Hamas, which the U.S. labels a terrorist organization but which is a growing political force across the Mideast.
"For all citizens with grievances democracy can be a path to lasting justice. But the democratic system cannot function if certain groups have one foot in the realm of politics and one foot in the camp of terror," Rice said.
Earlier Monday at a news conference in Sharm el Sheik, Rice said the world will be watching the elections. Her Egyptian counterpart promised the voting will be free, fair and open.
"Who would object to fair and transparent elections?" Egyptian Foreign Minister Ahmed Aboul Gheit said. "It will be so, I assure you."
Rice said she had discussed preparations for the elections with Mubarak, who surprised Washington and other Arab nations this spring when he announced his country would hold its first ever multiparty elections.
Limits on who can run and scattered violence and thuggery during a preparatory referendum raised international doubt that Mubarak is serious about reform.
Rice said the Egyptian voting must include an opportunity for opposition candidates to air their messages and said it is important "that there be a sense of competition."
"I believe our Egyptian friends understand that and that they will take their responsibility seriously because people will watch what happens in Egypt." Rice said.
Rice also said the U.S. is not passing judgment on other countries but is offering the world an example of open government where dissent and controversy are commonplace.
"What people on earth don't want to be able to say what they think and worship as they please," Rice said.
Aboul Gheit said he told Rice the allegations of mistreatment of the Quran and abuse of prisoners by American troops at the Abu Ghraib prison in Iraq resonated strongly in the Arab world.
"I told you also that there is anger in the region and that we have to work on this anger," Aboul Gheit said, looking directly at Rice.
Rice is midway through a Middle East tour marked by two main themes: the importance of success in the on-again, off-again Israeli-Palestinian peace process and the more nebulous notion that democracy is a realistic antidote for hopelessness and hatred.