* Military calls for national unity talks
* IMF loan deal delayed
* Opposition groups call for marches to presidential palace
* Mursi supporters also on the streets
* Clash over constitutional referendum on Dec. 15
By Yasmine Saleh and Marwa Awad
CAIRO, Dec 11 Egypt's army chief called for
talks on national unity to end the country's deepening 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 a destabilising series of protests since
President Mohamed Mursi awarded himself sweeping powers on Nov.
22 to push through a new constitution shaped by his Islamist
allies in a referendum on Saturday.
"We will not speak about politics nor about the referendum.
Tomorrow we will sit together as Egyptians," armed forces chief
and Defence Minister Abdel Fattah al-Sisi said at a joint
gathering of army and police officials.
An aide said Mursi had supported the call for talks. The
Muslim Brotherhood announced 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 criticised package of economic austerity
measures to the Egyptian people.
On Monday Muris backed down on planned tax rises, seen as
essential for the loan to go ahead, but which the opposition had
"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
prices of 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 programme
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 Cairo, 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 Mursi to postpone the referendum. Thousands gathered
outside the presidential palace, whose walls are scrawled with
A bigger crowd of flag-waving Islamist Mursi 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
In Egypt's second city of Alexandria, thousands of rival
demonstrators gathered at separate venues. Mursi'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 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
State Department spokeswoman Victoria Nuland emphasised
"deep concerns" over the situation in Egypt and repeated calls
on protesters to demonstrate peacefully and on security forces
to act with restraint.
"Key stakeholders in Egypt are raising real and legitimate
questions, both about the substance and about the process for
moving to a constitutional referendum this weekend," Nuland told
a news briefing. She declined to be drawn on whether Washington
believed the referendum itself should be postponed.
The turmoil has also put a big strain on the Egyptian
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
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.
In central Cairo police cars surrounded Tahrir Square, the
first time they had appeared in the area since shortly after
Mursi awarded himself the 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 Muslim Brotherhood and opponents who
gathered outside Mursi's presidential palace.
But 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. For the period of the referendum, the army has
been granted powers by Mursi allowing it to arrest civilians.
In statement issued after rights groups criticised 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.
Leftists, liberals and other opposition groups say the
hastily arranged constitutional referendum is polarising the
country and could put it in a religious straitjacket.
Islamists have urged their followers to show support for
Mursi and for a referendum they feel sure of winning.