Egypt are keen on naming Salah as one of three overaged players in the under-23 tournament but clubs are not obliged to release their players for the Olympics.
Liverpool instead want Salah to report for pre-season in the best shape in order to mount a meaningful title challenge next season.
Pearce knows a thing or two about the Olympic games, having taken charge of Great Britain in the London 2012 games, and the former Manchester City manager has accused Liverpool of being selfish by preventing Salah from linking up with his country.
"Of course Jurgen Klopp doesn’t want Salah at the Olympics because he’s supposed to look after the interests of Liverpool Football Club," Pearce told talkSPORT.
"You want Mo Salah to stay, but if I was a manager of a club or a coach I would never, ever stop a player representing his country, whatever level that might be.
"If I was a manager at any club and a player came to me and said to me, ‘I want to represent my country, I would not be selfish enough to turn around and say, ‘no’.
"All the international experiences I’ve had as a footballer, the biggest achievement of my football career is captaining my country.
"For me to then step into the world of management and have a total sea change, which managers do, by the way, all of a sudden international managers ring me up and say ‘release this player, release that player’ then they become club managers and try to block their players."
