Reuters: CAIRO: 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 series of destabilizing protests since President Mohammad Mursi awarded himself sweeping powers on Nov. 22 to push through a new Constitution shaped by his Islamist allies in a referendum Saturday.
 
“We will not speak about politics nor about the referendum. Tomorrow we will sit together as Egyptians,” armed forces chief and Defense Minister Abdel-Fattah al-Sisi said at a joint gathering of army and police officials.
 
An aide said Mursi supported the call for talks. The Muslim Brotherhood announced it would be there, while the main opposition coalition said it would decide 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.
 
Mursi backed down Monday 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. “I am optimistic ... everything will be well, God willing.”
 
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 standby loan, a spokeswoman said.
 
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 anti-Mursi graffiti.
 
A bigger crowd of flag-waving Islamist Mursi backers, who want the vote to go ahead as planned 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. Mursi’s backers chanted: “The people want implementation of Islamic law,” while his opponents shouted: “The people want to bring down the regime.” Other 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, signed a peace treaty with Israel in 1979.
 
State Department spokeswoman Victoria Nuland emphasized “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.
 
In central Cairo police cars surrounded Tahrir Square, the first time they had appeared in the area since the latest rounds of protests began.
 
The attackers, some masked, also threw Molotov cocktails 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. In statement issued after rights groups criticized Mursi’s decree granting the army 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.
 
Opposition groups said the hastily arranged constitutional referendum is polarizing 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.