Hardliners call on Luxor governor to quit after Mursi defence
* Al-Gamaa al-Islamiya members killed tourists in Luxor
* Appointment infuriated Egyptians, triggering protests
* Hardline group out in force at Friday's pro-Mursi rally
CAIRO, June 22 (Reuters) - A hardline Islamist group called on Saturday on one of its members to resign as governor of Luxor "for the sake of Egypt" despite President Mohamed Mursi defending the appointment.
Mursi infuriated many Egyptians this week by swearing in al-Gamaa al-Islamiya's Adel Mohamed al-Khayat as governor of the town where members of the group massacred 58 tourists at a pharaonic temple in 1997.
Al-Gamaa al-Islamiya, members of which were also charged with killing President Anwar Sadat in 1981, along with other politicians and police in the 1980s and 90s, renounced violence and condemned al Qaeda in ideological U-turns a decade ago.
Many of its members were jailed for decades under former President Hosni Mubarak but Mursi freed them last year shortly after his election following Mubarak's ousting by an uprising in 2011, with many moving into public life.
In an interview with the state-owned newspaper Akhbar Al-Youm published on Saturday, Mursi said: "There has never been a court ruling against the Luxor governor who was never condemned in the Luxor incident but was a suspect in the assassination of Sadat and was acquitted."
The hiring of Luxor governor showed that Mursi, who hails from the relatively moderate Muslim Brotherhood group is openly reaching out for a political alliance with the more radical and former militant group ahead of a big wave of opposition-led protests expected to start on June 30.
However, just hours after the paper carried the interview on its front page and three inside pages, Al-Gamaa al-Islamiya's political wing called on the new governor to resign.
"We are not after any post," the group's leader, Safwat Abdel Ghani told a news conference, adding he expected Khayat to officially announce his resignation on Saturday night. "We asked the new governor to resign for the sake of Egypt."
The group may be trying to find way a way out of the impasse before the opposition protests by showing it understands the needs of the country and taking the pressure off Mursi. Tourism is one of the mainstays of Egypt's economy, but has suffered badly in two years of unrest.
Mursi said al-Gamaa al-Islamiya's newly founded Construction and Development Party "works in the framework of a civil state and the governor was picked after was seen as better than all other candidates".
Mursi also appointed many members of his Brotherhood as governors, triggering protests in many cities and preventing the appointees entering their offices.
The president denied tourism minister had resigned over the Luxor appointment, although a source in the ministry said the minister has stopped going to his office since Khayat was named.
Thousands of protesters from al-Gamaa al-Islamiya, the Muslim Brotherhood and other Islamists' groups staged a big rally on Friday for Mursi and warned opponents, who they described as atheists, agents for Western states and anti-Islam, the would crush them if they forced Mursi out.
The opposition called it an attempt to "terrorise" them before mass rallies they plan for just over a week's time.
Echoing the same language as al-Gamaa al-Islamiya, opposition leader Mohamed ElBaradei called on Mursi to resign.
"The regime has to understand that time has come for change ... For the sake of Egypt, many Egyptians had elected Mursi and for Egypt I ask President Mohamed Mursi to resign and to leave for a new stage to begin," he told an opposition rally.
The June 30 rally is planned by a group of young independent Egyptians called Tamarud (Rebel), which says it has gathered more than 15 million signatures in a month from people among the 84 million population wanting Mursi to quit.
Both the youth movement and established opposition leaders are demanding an early presidential vote after what they describe as Mursi's failure to live up to any of his promises of more freedoms and better living and economic conditions.
But Mursi's allies say he needs more time than one year in office to tackle Egypt's deep economic and political problems. In a previous interview, Mursi described the call for an early presidential vote as "absurd and illegitimate".
In Saturday's interview, Mursi said the call for the June 30 protests "reflects an atmosphere of freedoms granted by the January (2011) revolution", but said that any expression of opinion has to be done peacefully and that the government was ready to face violence from any side with all measures. (Additinal reporting by Omar Fahmy, Writing by Yasmine Saleh; Editing by Alison Williams)