CAIRO (Reuters) - Egypt's military rulers dismissed complaints from protesters on Friday that it was entrenching its rule and blamed the Muslim Brotherhood's presidential candidate for stirring up emotions that drew thousands onto Cairo's Tahrir Square.
The Islamist candidate, Mohamed Morsy, shot back that the generals were defying the democratic will of the people and said protests would go on. But he stopped short of repeating a claim to have won last weekend's election, urging simply a rapid announcement of the result, and praised the army as "patriotic".
In a brusque four-minute statement read on state television as Egyptians returned from weekly prayers - and as the revolutionary bastion of Tahrir was chanting for democracy - the Supreme Council of the Armed Forces (SCAF) made clear it had no plan to heed calls to cancel a decree extending its powers or reverse its dissolution of the new, Islamist-led parliament.
"The issuance of the supplementary constitutional decree was necessitated by the needs of administering the affairs of the state during this critical period in the history of our nation," the off-screen announcer said, in the bureaucratic language favored by the generals who pushed aside brother officer Hosni Mubarak last year to appease the angry millions on the streets.
In what were menacing tones for the army's old adversary the Muslim Brotherhood, SCAF said people were free to protest - but only if they did not disrupt daily life.
At Tahrir, the broad traffic interchange by the Nile in central Cairo was filled with makeshift tents offering shade from the midday sun, hawkers offering an array of goods from tea to "I Love Tahrir Square" T-shirts. Many knelt in prayer during the weekly service. Large groups of pious Islamists were bussed in from the provinces by their parties.
The crowd chanted and waved Egyptian flags.
The deadlock between Egypt's two strongest forces raised grave doubts on the prospects for consensual democracy, though some see possible compromise, if Morsy does become president.
The SCAF statement read: "Anticipating the announcement of the presidential election results before they are announced officially is unjustifiable, and is one of the main causes of division and confusion prevailing the political arena."
It also said the army had no power to repeal the dissolution of parliament, saying that was down to judges who ruled some of January's election rules unconstitutional. Critics say the judges were appointed under Mubarak and are not impartial.
PROTESTS
The Brotherhood is mounting protest vigils on town squares to demand the reversal of the decree and the dissolution. It also fears a delay in announcing the result of the presidential election indicates an attempt to cheat - though opponents say it is the Islamists who are not playing fair.
Morsy and former general Ahmed Shafik both say they believe they won the run-off ballot. But it is Morsy's declaration of victory within hours of polls closing - far more than Shafik's later, more cautious statements - which has driven debate about underhand tactics in a country long used to vote-rigging.
The delay in publication of results, due on Thursday but not now expected until at least Saturday, has heightened anxiety on all sides, although all sides say they will protest peacefully.
Morsy told a news conference he would continue to reject SCAF's decree, which was issued as polls closed on Sunday, two days after the constitutional court gave the military grounds to dissolve parliament: "The constitutional declaration clearly implies attempts by the military council to restrict the incoming president," he said. "This we totally reject."
But with no obvious resolution in sight to the stand-off, Morsy also made conciliatory references to the army: "There is no problem between us and our patriotic armed forces," he said.
"We do not agree to the issuing of the constitutional decree and neither do the people. Why do we need a supplementary declaration when we are going to draft a new constitution?"
After the blunt warning about declarations of election victory, Morsy notably did not repeat his claim to have won, but called instead for a speedy announcement to end the uncertainty.
In a country where virtually no one can remember an election that was not rigged before last year, trust is low, not least among Brotherhood officials, many of whom, like Morsy, were jailed under Mubarak for their political activities.
The same electoral commission that handed an improbable 90 percent of a November 2010 parliamentary vote to Mubarak's supporters - a result which fuelled the protests that brought him down a few weeks later - sits in judgment on the new presidency.
SCARE TACTIC
While many of the urban liberals who began the uprising against Mubarak 17 months ago are uneasy about the electoral success of the Islamists, the prospect of Shafik winning, or of the army retaining power behind an impotent President Morsy, would for them mean the failure of their revolution.
Hassan Nafaa, a political analyst and critic of Mubarak, said: "The military council's statement is intended to scare the people and quell the revolutionary spirit of the nation through the firm authoritarian tone in which the statement was delivered. But this will not work because all politically aware civilians refuse the military's stewardship over the state."
Among mostly Islamist protesters, sentiment was also firm.
"This is a classic counter revolution that will only be countered by the might of protesters," said Safwat Ismail, 43, a member of the Muslim Brotherhood who came from the Nile Delta. "I am staying in the square until the military steps down."
Mahmoud Mohammed, a bearded, 31-year-old marine engineer from Alexandria among a group from the more fundamentalist Salafist movement camping on the square, insisted they were not looking for a battle, but wanted to see democracy installed.
"The people elected a parliament and they put it in the rubbish bin. We need the army to hand over," he said, adding: "No one came here for a fight. We need democracy."
Though tension is real across the country, many of Egypt's 82 million people are weary of turmoil and economic crisis, so it is unclear how large protests might become - though the Brotherhood alone has formidable reserves and capacities.
On Friday, most people appeared to be staying at home and passing Friday's Muslim weekend as normal, though once the fierce sun goes down, gatherings might grow.
Events of the past week, which also saw a renewal of the power of military police to arrest civilians, have unnerved Western allies, notably the United States which has long been the key sponsor of the Egyptian armed forces but now says it wants to see them hand power to civilians.
Adding to unease, Mubarak is himself back in the news, being transferred to a military hospital on Tuesday evening from the prison where he began a life sentence this month.
Military and security sources have given a confusion of accounts about his condition, from "clinically dead" at one point, to being on life support after a stroke to "stabilizing". Many Egyptians suspect his fellow generals may be exaggerating his illness to get their old comrade out of jail.
(Additional reporting by Dina Zayed, Shaimaa Fayed, Tom Perry, Edmund Blair, Patrick Werr, Tamim Elyan and Yasmine Saleh; Writing by Alastair Macdonald Editing by Philippa Fletcher)
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