Egypt rivals claim presidency as army tightens grip

CAIRO (Reuters) - Egypt's agonised passage from revolution to democracy was in limbo on Monday, as the Muslim Brotherhood claimed victory in a presidential election while the generals who took over from Hosni Mubarak decreed it was they who would keep most power.

The former air force commander running against the Islamist dismissed Mohammed Morsy's self-declared triumph as a bid to "hijack" the election. Ahmed Shafik, who was also Mubarak's last prime minister, said that it was he in fact who was ahead.

As a day of counting, and mutual jibes over violations, wore on, there was no official word on how the two-day run-off went and electoral supervisors warned they may not publish any result until Thursday - prolonging what for many Egyptians has become a wearisome deadlock between a military past and religious future.

Shafik's camp insisted he led by two to four points but even sources in the army, which has fought the Brotherhood through six decades of military rule, indicated they were preparing to accept that Morsy had won Egypt's first free presidential vote.

Whoever emerges as president - and at least one electoral official privately endorsed Morsy's claim to be leading by 52 percent to 48 with the bulk of votes counted - he will find his powers tightly circumscribed by a decree issued by Field Marshal Hussein Tantawi's military council as polls closed on Sunday.

Having last week dissolved the parliament that was elected in January with a thumping Islamist majority, the Supreme Council of the Armed Forces (SCAF) said on Sunday it would now take back the assembly's legislative powers and could also step in to break a deadlock in drafting a new constitution.

Liberals and Islamists called it a "military coup".

"Military Transfers Power, to Military," ran the ironic headline in independent newspaper al-Masry al-Youm.

Tantawi, Mubarak's defence minister for 20 years, promised Egyptians who entrusted him with their revolutionary victory to hand power to civilians by July 1. That pledge, endorsed by the United States, the army's $1.3 billion-a-year sponsor, would be satisfied, a military council member said, with a ceremony to be held by June 30 to swear in the new civilian head of state.

Yet he will be a president who can only appoint a government whose every law must be endorsed by SCAF. A timetable set down for writing a constitution, passing it by referendum and then electing a parliament could leave Tantawi in charge until 2013.

The Brotherhood, however, expressed its joy and defiance on the streets and Morsy, a 60-year-old, U.S.-educated engineer who was a political prisoner under Mubarak, promised to be a leader of all Egyptians - a nod to the many, from Christians to secular liberals to moderate Muslims, who fear intolerant clerical rule.

"Thanks be to God who has guided Egypt's people to the path of freedom and democracy, uniting Egyptians for a better future," Morsy said in a victory speech to supporters in Cairo during which he forswore revenge or the settling of scores.

In a cameo moment that spoke of his lightning journey from obscure apparatchik to national celebrity - he was mocked as the party's "spare wheel" when a more senior figure was barred from the race in April - Morsy was caught on camera before his speech telling an aide to let his family know they would see him on TV.

ISLAMIC FUTURE

Hundreds of flag-waving supporters of the Brotherhood, whose members long suffered torture and death at the hands of the generals, gathered in Cairo's Tahrir Square. It was there that the anti-Mubarak revolt was launched on January 25, 2011, mainly by secular young urbanites, later joined by the Brotherhood.

"Thank God, we have got rid of military rule and the police state," said Mona Issam, one of a group of cheering women clad in long robes and full-face veils. "We hope Morsy takes power from the military council and the army goes back to barracks.

"We lived like strangers in our land under the old regime. We were oppressed and Islam was not the law."

Hosni Qutb, a 45-year-old physician, derided Shafik as the "candidate of Israel", in reference to the military rulers' 33-year-old peace treaty with Egypt's Jewish neighbour. Israel fears growing hostility from Cairo and said an Israeli and two militants were killed in an attack on its border overnight.

However, the crowds hardly attracted notice in the morning rush hour and measured barely a drop compared with the human sea that engulfed central Cairo on February 11 last year when Mubarak fell, pushed aside by generals fearful of losing their own privileges.

Morsy attracted support from many who reject his religious agenda and the imposition of Islamic law but wanted to bar the way to Shafik, 70, whom they see as the heir to the old regime.

As Islamists celebrated, unemployed Mohamed Mahmoud, 28, did not share their joy: "I voted for Morsy but I can't say I'm happy," he said. "I'm still afraid of both and what they may do.

"I don't want an Islamic state or a new Mubarak state."

Political chaos has ravaged a vital tourist trade focused on pyramids and Red Sea beaches and the latest turn of events, by prolonging uncertainty, may further harm the economy. The main stock market index fell 3.4 percent to a five-month low.

"How can you possibly make these huge economic decisions in such circumstances?" says Gabriel Sterne, an economist at London investment banking house Exotix. "Such events as these only serve to undermine confidence and accelerate capital flight."

"SETBACK FOR DEMOCRACY"

The military council's "constitutional declaration", issued under powers it took for itself last year, was a blow to democracy, said many who aired their grievances on social media.

"Grave setback for democracy and revolution," tweeted former U.N. diplomat and Nobel peace laureate Mohamed ElBaradei.

"This decree just makes plain the hegemony of SCAF," said Khaled Ali, an activist lawyer who was eliminated in the first round of presidential voting despite a strong, youthful following. "This decree strips the president of the powers he was elected to have and gives those to the military council, whose members were appointed by the old regime," he said.

The order indicated that the army, which controls swathes of Egypt's economy, has no intention of handing substantial power to its old Islamist adversary and may be hoping that public disillusion with the Brotherhood's performance will reduce its influence on the new constitution and the next parliament.

The Brotherhood has contested the army's power to dissolve the present parliament. It warned of "dangerous days" ahead. But few expect the Islamists, who were not in the vanguard of the revolt and spent much of the past year in uneasy symbiosis with the army, to launch a violent grab for power any time soon.

"This is the beginning of a very tough path," a senior Brotherhood official, Essam el-Haddad told Reuters, "The beginning of it is dealing with the amended constitutional declaration that strips the president of any real powers."

The failure of the new parliament to agree a consensus body to draft a constitution - liberals accuse the Islamists of packing the panel with religious zealots - has left Egyptians picking their way from revolution to democracy through a legal maze while the generals control the map and change it at will.

Under the latest order, writing of the new constitution may pass to a body appointed by the SCAF - if a court rules against the contested panel nominated by the now defunct legislature.

Any new constitution would need approval in a referendum, with a new parliamentary election following. By a timetable contained in the decree, it would take another five months or so to complete the planned "transition to democracy".

However, the experience of the past year has left many Egyptians doubting that the military, and what they call the "deep state" stretching across big business, Mubarak-era judges, security officials and the army, will ever hand over control.

"The military has more power now than it had over the past year and more control over events now that parliament is dissolved," said Said Hirsh, an economist at Capital Economics in London. "The new president will not be able to do much.

"SCAF isn't going to transfer any real power," Marc Lynch, a Middle East expert at George Washington University said on Twitter of the constitutional order. "Back to the beginning."

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