CAIRO - Egypt's army chief called for talks on national unity
to end the country's mounting political crisis after a vital loan from the IMF
was delayed and thousands of pro- and anti-government demonstrators took to the
streets.
The meeting scheduled for Wednesday afternoon was called in
response to an increasingly destabilising series of protests that has unfolded
since President Mohamed Morsi awarded himself sweeping powers on November 22 to push
through a new constitution shaped by his Islamist allies in a referendum on
Saturday.
Armed forces chief and Defense Minister Abdel Fattah al-Sisi
called for a meeting of "national unity for the love of Egypt to bring together
partners of the country in the presence of the president of the republic", the
army spokesman said.
An aide said Morsi had supported the call for talks.
The Muslim Brotherhood said it would be there, while the main opposition
coalition said it would decide on Wednesday morning whether to
attend.
Earlier, the finance minister disclosed that a $4.8 billion
International Monetary Fund loan, a cornerstone of Egypt's economic recovery
hopes, would be delayed until next month.
Mumtaz al-Said said the delay
was intended to allow time to explain a widely criticized package of economic
austerity measures to the Egyptian people.
The announcement came after
Morsi on Monday backed down on planned tax rises, seen as essential for the loan
to go ahead, but which the opposition had fiercely criticized.
"Of course
the delay will have some economic impact, but we are discussing necessary
measures (to address that) during the coming period," Said told Reuters, adding:
"I am optimistic ... everything will be well, God willing." Prime Minister
Hisham Kandil said the measures would not hurt the poor. Bread, sugar and rice
would not be touched, but cigarettes and cooking oil would go up and fines would
be imposed for public littering. In a bid to rebuild consensus, he said there
would be a public consultation about the program next week.
In
Washington, the IMF said Egypt had asked for the loan to be postponed "in light
of the unfolding developments on the ground". The Fund stood ready to consult
with Egypt on resuming discussions on the stand-by loan, a spokeswoman
said.
Gunmen open fire
On the streets of the capital, tensions ran high
after nine people were hurt when gunmen fired at protesters camping in Tahrir
Square, according to witnesses and Egyptian media.
The opposition has
called for major protests it hopes will force Morsi to postpone the referendum.
Thousands gathered outside the presidential palace, whose walls are scrawled
with anti-Morsi graffiti.
A bigger crowd of flag-waving Islamist Morsi
backers, who want the vote to go ahead as planned on Saturday, assembled at a
nearby mosque, setting the stage for further street confrontations in a crisis
that has divided the nation of 83 million.
In Egypt's second city of
Alexandria, thousands of rival demonstrators gathered at separate venues.
Morsi's backers chanted: "The people want implementation of Islamic law," while
his opponents shouted: "The people want to bring down the regime." Others cities
also witnessed protests.
The upheaval following the fall of Hosni Mubarak
last year is causing concern in the West, in particular the United States, which
has given Cairo billions of dollars in military and other aid since Egypt, the
Arab world's most populous nation, made peace with Israel in 1979.
The
turmoil has also placed a big strain on the economy, sending foreign currency
reserves down to about $15 billion, less than half what they were before the
revolt two years ago as the government has sought to defend the
pound.
"Given the current policy environment, it's hardly a surprise that
there's been a delay, but it is imperative that the delay is brief," said Simon
Williams, HSBC economist in Dubai. "Egypt urgently needs that IMF accord, both
for the funding it brings and the policy anchor it affords." The IMF deal had
been seen as giving a seal of approval to investors and donors about the
government's economic plans, vital for drawing more cash into the economy to
ease a crushing budget deficit and stave off a balance of payments
crisis.
Masked attackers
In central Cairo, police cars surrounded Tahrir
Square in central Cairo, the first time they had appeared in the area since
shortly after Morsi awarded himself sweeping temporary powers in a move that
touched off widespread protests.
The attackers, some masked, also threw
petrol bombs that started a small fire, witnesses said.
"The masked men
came suddenly and attacked the protesters in Tahrir. The attack was meant to
deter us and prevent us from protesting today," said John Gerges, a Christian
Egyptian who described himself as a socialist.
The latest bout of unrest
has so far claimed seven lives in clashes between the Islamist Muslim
Brotherhood and opponents who gathered outside Morsi's presidential
palace.
The Republican Guard, which protects the palace, has yet to use
force to keep protesters away from the building, now ringed with tanks, barbed
wire and concrete barricades.
The army has told all sides to resolve
their differences through dialogue, saying it would not allow Egypt to enter a
"dark tunnel". For the period of the referendum, the army has been granted
powers by Morsi allowing it to arrest civilians.
In statement issued
after rights groups criticized the army's new police powers, the presidency said
anyone arrested by the military during the referendum would face civil rather
than military courts. It said the army's new role would only last until results
are declared after Saturday's referendum.
The army has portrayed itself
as the guarantor of the nation's security, but so far it has shown no appetite
for a return to the bruising front-line political role it played after the fall
of Mubarak, which severely damaged its standing.
Opposition marches
Leftists, liberals and other opposition groups say the hastily arranged
constitutional referendum is polarizing the country and could put it in a
religious straitjacket.
Opposition leaders want the referendum to be
delayed and hope they can get sufficiently large numbers of protesters on the
streets to change Morsi's mind.
The main association of Egypt's
judiciary, the Judges' Club, voted against supervising the referendum, but the
Islamists are confident they can muster enough judges to make sure the vote goes
ahead with the necessary judicial supervision.
Islamists have urged their
followers to show support for Morsi and for a referendum they feel sure of
winning.
The opposition says the draft constitution fails to embrace the
diversity of the population, a tenth of which is Christian, and invites Muslim
clerics to influence lawmaking.