Egypt's army chief, General Abdel Fattah al-Sisi, told military and police officers on Sunday that his message to the supporters of deposed Islamist President Mohamed Morsi is that "there is room for everyone in Egypt".
But in his first public comments since last week's security crackdown on the supporters of deposed president Mohamed Morsi, al-Sisi also warned that violent behavior would not be tolerated.
Meanwhile, some 38 supporters of the Muslim Brotherhood died on Sunday in an incident at an Egyptian prison, security and legal sources said, giving conflicting versions of the deaths.
The Interior Ministry did not immediately confirm the death toll, but said in a statement that a number of detainees had tried to escape from a prison on the outskirts of Cairo and had taken a police officer hostage.
In subsequent clashes, the ministry said an undisclosed number of people had died from inhaling tear gas rounds. It added that the officer was freed but badly wounded.
However, offering a different explanation, a legal source told Reuters that the Brotherhood followers had suffocated in the back of a crammed police van while being taken to prison.
The Muslim Brotherhood had reportedly canceled Cairo protests scheduled for Sunday afternoon, saying that the Egyptian army has placed snipers on building rooftops, according to Al Jazeera.
According to the report, a press conference meant to place on Sunday evening has also been cancelled.
More than 700 people, including hundreds of Morsi supporters and dozens of members of the Egyptian security forces, have been killed in violence that broke out last Wednesday, when the authorities began cracking down on Morsi supporters who have been stating street protests since his ouster by al-Sisi's forces six weeks ago. The government imposed a month-long state of emergency and introduced a curfew in major cities across Egypt.
The capital's frenetic streets, unusually empty in the past few days, were returning to normal Sunday, although the army kept several big squares closed and enforced a curfew overnight. At night, soldiers standing by armored personnel carriers man checkpoints and vigilantes inspect cars for weapons. The Brotherhood has said it will keep up mass protests until Morsi, toppled by the army on July 3 after huge demonstrations against him, is freed from jail and returned to office.
Banks and the stock market reopened for the first time since Wednesday, and shares plunged 2.5 percent. "As long as we have bloodshed on the streets, it takes away any reason for foreign and regional investors to buy in Egypt," said Amer Khan, director at Shuaa Asset Management in Dubai.
An initiative by Deputy Prime Minister Ziad Bahaa el-Din, a liberal, calls for an immediate end to the state of emergency, political participation for all parties and guarantees of human rights, including the right to free assembly. El-Din stayed in office even after a leading fellow liberal, Deputy President Mohamed ElBaradei, resigned over the violent break-up of the protest camps in Cairo.
It was not clear how much support el-Din's proposal could gain among the new leaders of a deeply polarized Arab republic experiencing the worst bout of bloodshed and internecine conflict in its six-decade history. Blaming a defiant Muslim Brotherhood for the bloodletting, Egyptian Prime Minister Hazem el-Beblawi has proposed banning the 85-year-old movement and effectively forcing it underground.
"There will be no reconciliation with those whose hands have been stained with blood and who turned weapons against the state and its institutions," Beblawi told reporters Saturday. His proposal does not address Morsi's fate or specifically call for an amnesty for detained leaders of the Brotherhood.
The Islamist group, which won five successive votes held in Egypt after President Hosni Mubarak fell in 2011, now faces the prospect of political elimination by army-backed rulers who say the most populous Arab nation is at war with "terrorism".
During Morsi's year in power, accusations of incompetence and attempts to monopolize government tarnished the reputation the Brotherhood had acquired for social work and upholding Islamic principles in 30 years of opposition to Mubarak. Brotherhood leaders accuse the military of deliberately sabotaging their time in office and plotting their demise.
The bloodshed has earned Egypt stiff condemnation
from Western nations, uncomfortable with Islamist rule but also with the overthrow of a freely elected government. But it has, however, drawn messages of support from wealthy Arab allies such as Saudi Arabia, which have long feared the spread of Brotherhood ideology to the Gulf monarchies.
The United States
has delayed delivery of four F-16 fighters to Egypt and cancelled a joint military exercise to rebuke the army for its actions, but it has not halted the $1.55 billion in mostly military aid that it gives Cairo every year.
Egypt's interim Foreign Minister Nabil Fahmy sought to preempt any attempt by the West to pressure Egypt by cutting financial aid by announcing he would scrutinize all foreign assistance.
"By reviewing aid I want to determine what is useful and what is not and what aid is being used to pressure Egypt and whether this aid has good intentions and credibility. We will proceed based on our findings," he told reporters on Sunday.
"We are not looking to replace one friend with another but we will look out to the world and continue to establish relations with other countries so we have options," he said.
"The relation between Egypt and the US has been there for a long time. It has been through ups and downs in the past. We hope things will go back to normal promptly," Fahmy said.
The Foreign Ministry, as part of a push to disseminate the state's narrative of events, also distributed a pack of photos showing what it said were Muslim Brotherhood members carrying clubs and firearms - and in one picture a black al-Qaida flag.
The Brotherhood denies links to the global militant network.
On Saturday, Morsi supporters exchanged fire with security forces in a central Cairo mosque where scores of protesters had sought refuge from confrontations with police the day before.
Police cleared the building and made arrests, with onlookers cheering them on and harassing foreign reporters at the scene.
"We as Egyptians feel deep bitterness towards coverage of the events in Egypt," presidential political adviser Mostafa Hegazy said, accusing Western media of ignoring attacks on police and the destruction of churches blamed on Islamists.
At least 173 people were killed on Friday during a "Day of Rage" called by the Brotherhood two days after police destroyed its protest camps. Police have since arrested more than 1,000 Brotherhood "elements". The state news agency said 250 faced possible charges of murder, attempted murder or terrorism.
The Brotherhood has called for daily street protests this week, but there were no reports of trouble on Sunday morning.