President Mohamed Morsi has ordered the military to maintain security and protect Egypt institutions in the run-up to a controversial referendum on a new constitution.
The army has also been given the power of arrest.
Mohamed Morsi has tried to calm public anger by annulling a decree giving him huge powers, but rejected a call to scrap the 15 December constitutional vote.
Opposition leaders called for protests on Tuesday against the referendum.
The opposition was “not aiming at toppling the president” but wanted a better constitution, said former Foreign Minister Amr Moussa.
Islamist groups have said they will hold counter demonstrations, raising fears of further bloody clashes on the streets of the Egyptian capital.
In another apparent concession, the president suspended a big tax increase on the sale of a variety of goods including soft drinks, cigarettes and beer.
The decision was carried in a statement that appeared on Mohamed Morsi’s Facebook page in the early hours of Monday, state-owned al-Ahram newspaper reported.
As tension increased before Saturday’s referendum, Mohamed Morsi ordered the military to maintain security “up to the announcement of the results from the referendum”, AFP news agency reports.
The step will raise fears that Egypt is moving back towards military rule.
Under the new presidential decree, the military is asked to co-ordinate with the police on maintaining security and is also entitled to arrest civilians.
The police have been seen as weakened since the fall of former President Hosni Mubarak and failed to intervene when anti-Muslim Brotherhood protesters ransacked the Islamist movement’s Cairo headquarters last week, correspondents say.
An increased military presence was visible on Monday close to the presidential palace, which has been the focus of opposition demonstrations. The army has sealed off the area with concrete blocks.
It is not yet clear whether the opposition will boycott Saturday’s referendum. However, a group of senior judges announced on Monday that they would be prepared to oversee the vote, on certain conditions.
Votes in Egypt are traditionally supervised by the judiciary but the November 22nd presidential decree led thousands of judges to go on strike.
Mohamed Morsi has ordered the military to maintain security and protect Egypt institutions in the run-up to a controversial referendum on a new constitution
Now, with the decree rescinded, the State Council Judges’ Club has agreed to oversee the vote as long as pro-Morsi supporters call a halt to a sit-in outside Egypt’s Supreme Constitutional Court.
The court suspended work on 2 December, citing “psychological pressure” from Islamists who had prevented a meeting on a draft of the new constitution. The protesters had wanted to block a ruling on the legality of the document.
The opposition argues that the constitution was drafted by an assembly dominated by Mohammed Morsi’s Islamist allies.
In a statement after talks on Sunday, the opposition National Salvation Front said it would not recognize the draft constitution “because it does not represent the Egyptian people”.
“We reject the referendum which will certainly lead to more division and sedition,” spokesman Sameh Ashour said.
On Sunday, hundreds of opposition protesters protested against the referendum outside the presidential palace.
They chanted anti-Muslim Brotherhood slogans and held up banners reading slogans such as “Morsi, hold back your thugs” and “The people demand the fall of the regime”.
But Mohamed Soudan, foreign relations secretary of the Muslim Brotherhood’s Freedom and Justice Party, said Mohamed Morsi was constitutionally bound to go ahead with the vote because the date had been announced by the constituent assembly.
The president says he is trying to safeguard the revolution that overthrew Hosni Mubarak last year, but his critics accuse him of acting like a dictator.
Mohamed Morsi’s decree of 22 November stripped the judiciary of any right to challenge his decisions and triggered violent protests.
Although the decree has been annulled, some decisions taken under it still stand.
The general prosecutor, who was dismissed, will not be reinstated, and the retrial of former regime officials will go ahead.
The Egyptian army has deployed tanks and armored troop carriers outside the presidential palace in Cairo after clashes between supporters and rivals of President Mohammed Morsi.
The streets of the capital are now reported to be calm following the earlier violence that left five people dead and hundreds injured.
Egypt is seeing growing unrest over a controversial draft constitution.
The government insists that a referendum will go ahead this month.
The clashes are possibly the most dangerous development in Egypt’s growing political crisis.
The violence, which opposition leaders accused Mohamed Morsi’s Islamist Muslim Brotherhood movement of organizing, was ominously reminiscent of the tactics used by former President Hosni Mubarak during the revolution.
Supporters of Mohamed Morsi responded to a call to rally outside the presidential palace, in the suburb of Heliopolis, on Wednesday afternoon.
The mainly secular opponents of the president were already staging a sit-in protest there, after tens of thousands of them besieged the palace on Tuesday.
Stones and petrol bombs were thrown and there were reports of gunfire as Morsi supporters dismantled some of the tents set up by their opponents.
The Brotherhood later called on all sides to “withdraw at the same time and pledge not to return there given the symbolism of the palace”.
Disorder was also reported in other cities, with Muslim Brotherhood offices attacked in Ismailia and Suez.
The Egyptian army has deployed tanks and armored troop carriers outside the presidential palace in Cairo after clashes between supporters and rivals of President Mohammed Morsi
In a joint news conference, Mohamed ElBaradei, Amr Moussa and other leading figures of the opposition National Rescue Front said they held Mohamed Morsi fully responsible for the violence.
“Our opinion was, and still is, that we are ready for dialogue if the constitutional decree is cancelled … and the referendum on this constitution is postponed,” said Mohamed ElBaradei.
“The revolution did not happen for this. It happened for freedom, democracy and human dignity.
“Morsi must listen to the people, whose voice is loud and clear. There is no legitimacy in excluding the majority of the people,” he said.
Speaking on Wednesday, Vice-President Mahmoud Mekki said the vote on the draft constitution was still scheduled for 15 December, but that the “door for dialogue” remained open, indicating that changes could be made to the document later.
Critics say the draft was rushed through parliament without proper consultation and that it does not do enough to protect political and religious freedoms and the rights of women.
The draft added to the anger generated by Mohamed Morsi passing a decree in late November which granted him wide-ranging new powers.
Four of Mohamed Morsi’s advisers resigned on Wednesday in an apparent protest. Three others did so last week and Egypt’s Mena news agency reported a further resignation on Thursday.
In his news conference, broadcast earlier on state television, Mahmoud Mekki said there was “real political will to pass the current period and respond to the demands of the public”.
But he said there “must be consensus” on the constitution, and that “the door for dialogue is open for those who object to the draft”.
“I am completely confident that if not in the coming hours, in the next few days we will reach a breakthrough in the crisis and consensus,” he said.
The government has been speaking for some time about the need for dialogue, but has offered few concrete concessions which would end the crisis.
Mohamed Morsi adopted sweeping new powers in a decree on 22 November, and stripped the judiciary of any power to challenge his decisions.
Mohamed Morsi, who narrowly won Egypt’s first free presidential election in June, says he will give up his new powers once the new constitution is ratified.
Egyptians are starting to vote in their first free presidential election, 15 months after ousting Hosni Mubarak in the Arab Spring uprising.
Fifty million people are eligible to vote, and queues are forming at some polling stations.
The military council which assumed presidential power in February 2011 has promised a fair vote and civilian rule.
The election pits Islamists against secularists, and revolutionaries against Mubarak-era ministers.
The frontrunners are:
• Ahmed Shafiq, a former commander of the air force and briefly prime minister during February 2011 protests
• Amr Moussa, who has served as foreign minister and head of the Arab League
• Mohammed Mursi, who heads Muslim Brotherhood’s Freedom and Justice Party
• Abdul Moneim Aboul Fotouh, an independent Islamist candidate.
Egyptians are starting to vote in their first free presidential election, 15 months after ousting Hosni Mubarak in the Arab Spring uprising
Until a new constitution is approved it is unclear what powers the president will have, prompting fears of friction with the military.
Voting began promptly at 08:00 local time, with queues observed at many Cairo polling stations growing longer by the minute.
“It’s a very big day,” said one woman. “This is a real great moment for the Egyptians to change.”
Another, when asked how long she had been waiting to vote, replied, with a laugh: “30 years.”
One man said it was most important for the new president to have his own programme.
“Actually he has to be in the revolution, or he has to be a strong part in the revolution. This is something which is not negotiable,” he said.
Mohammed Mursi was originally the Muslim Brotherhood’s reserve candidate, but he was thrust into the limelight after its first choice, Khairat al-Shater, was disqualified by the Higher Presidential Electoral Commission (HPEC) over an unresolved conviction.
The Brotherhood have nevertheless likened Mohammed Mursi, a US-educated engineer and MP, to an underrated football substitute.
“In any match there is the reserve who plays in the last 10 minutes, scores the goal and wins the match. Mursi is our reserve player,” said cleric Mohamed Abdel Maqsoud while addressing a crowd of Brotherhood supporters on Sunday.
A run-off vote is scheduled for 16 and 17 June if there is no outright winner.
There is also a potential clash waiting to happen with the military, which seems determined to retain its position as the power behind the president’s chair.
And the electorate does not know what powers the new president will have to do his job, as they are still waiting for them to be spelled out in a new constitution.
The election is being hailed as a landmark for Egyptians, who have the opportunity to choose their leader for the first time in the country’s 5,000-year recorded history.
The Supreme Council of the Armed Forces (SCAF), worried about potential post-election unrest, has sought to reassure Egyptians that it will be the voters themselves who decide who will be the next president.
“It is important that we all accept the election results, which will reflect the free choice of the Egyptian people, bearing in mind that Egypt’s democratic process is taking its first step and we all must contribute to its success,” it said in a statement on Monday.
The 15 months since Hosni Mubarak was forced from power has been turbulent, with continued violent protests and a deteriorating economy.
Foreign direct investment has reversed from $6.4 billion flowing into the country in 2010 to $500 million leaving it last year.
Tourism, a major revenue generator for the country, has also dropped by a third.
The new president will also have to reform the police to deal with the rash of crime that followed the uprising.
As many as a third of voters are reported to be undecided about which candidate to choose.
The Arab Spring began in Tunisia last year when weeks of protests forced President Zine al-Abidine Ben Ali from power, inspiring pro-democracy activists across the Arab world.
Egyptian President Hosni Mubarak, in power for three decades, resigned on 11 February 2011 after 18 days of protests in Cairo and other cities.
Hosni Mubarak is on trial for his alleged role in the deaths of protesters, and a verdict in the case is due on 2 June.