The United Nations cultural body UNESCO said it was trying
to find out the precise damage done to the Ahmed Baba Institute,
a modern building that contains priceless documents dating back
to the 13th century.

The manuscripts are “uniquely valuable and testify to a long
tradition of learning and cultural exchange,” said UNESCO
spokesman Roni Amelan. “So we are horrified.”

But if they are horrified, historians and religious scholars
are unlikely to have been surprised by this gesture of defiance
by Islamist rebels fleeing the ancient trading post on the
threshold of the Sahara as French and Malian troops moved in.

“It was one of the greatest libraries of Islamic manuscripts
in the world,” said Marie Rodet, an African history lecturer at
London’s School of Oriental and African Studies.

“It’s pure retaliation. They knew they were losing the
battle and they hit where it really hurts,” she told Reuters.

Turban-swathed Tuareg rebels first swept into Timbuktu back
in April 2012 to plant the flag of their newly declared northern
Mali homeland.

Before the occupation, Timbuktu and its ancient mosques and
burial grounds had become an obligatory stop for budget
backpackers seeking the desert experience and scholars looking
for historical wisdom from rare Islamic texts.

Written in ornate calligraphy, these manuscripts form a
compendium of learning on everything from law, sciences,
astrology and medicine to history and politics, which academics
say prove Africa had a written history at least as old as the
European Renaissance.

For years, people came to experience what locals called “the
mystery of Timbuktu”. They also came for camel rides at the
gates of the desert, boat rides on the Niger river to spot
hippos, and to visit the city’s famous mud-built mosques with
their distinctive turrets and protruding timber beams.

But soon after the Tuareg invasion, the city of the 333
Saints fell under the sway of Islamist radicals. Bars and hotels
closed and the tourists, already spooked by earlier incidents of
abduction and murder by al Qaeda linked militants, stayed away.

CAMPAIGN OF DESTRUCTION

It was not long before the Islamists imposed severe Sharia
law and set about a campaign of destruction of centuries-old
Sufi sites that prompted international outrage.

Shrines, graves and mausoleums were attacked with pick-axes,
shovels and even bulldozers. The bones of Sufi saints were dug
up, and the hard-liners tore down a mosque door that locals
believed had to stay shut until the end of the world.

The militants from the Malian Ansar Dine militant group that
occupied Timbuktu (the name means Defenders of the Faith in
Arabic) espouse an uncompromising version of Islam that rejects
what it sees as idolatry and aims to destroy all traces of it.

In Timbuktu, their targets have been sites revered by Sufis,
a mystical school of popular Islam which honours its saints with
ornate shrines. At least half of 16 listed mausoleums in the
city have been destroyed, along with a substantial part of the
history of Islam in Africa.

A spokesman for Ansar Dine, asked to comment last year on
the smashing of Sufi mausoleums in Timbuktu, said their actions
were ordained by faith. “We are subject to religion and not to
international opinion,” the spokesman said.

Similar episodes have been recorded in Libya following the
fall of Muammar Gaddafi, when Islamists used a bulldozer to dig
up Sufi graves in a cemetery in the city of Benghazi.

Most notoriously, Afghanistan’s ruling Taliban blew up two
giant 6th century statues of Buddha at Bamiyan in 2001, despite
outcry from around the world.

UNESCO Director-General Irina Bokova has made appeals for
the warring parties to spare “Timbuktu’s outstanding earthen
architectural wonders”. These include the Sankore, Sidi Yahia
and Djingarei-ber mosques, the last Timbuktu’s oldest, built
from mud bricks and wood in 1325.

The origins of Timbuktu – the name is believed to derive
from the words Tin-Boctou (meaning the place or well of Boctou,
a local woman) – date back to the 5th century.

The site on an old Saharan trading route that saw salt from
the Arab north exchanged for gold and slaves from black Africa
to the south, blossomed in a 16th century Golden Age as an
Islamic seat of learning, home to priests, scribes and jurists.

A 15th century Malian proverb proclaims: “Salt comes from
the north, gold from the south, but the word of God and the
treasures of wisdom are only to be found in Timbuctoo.”

RUMOURS OF GOLD

It was rumours of gold that drove European explorers to
cross the trackless sands of the Sahara to search for the
legendary city, already known for centuries to local inhabitants
who traversed the deserts on camelback and navigated the muddy
brown waters of the Niger by canoes.

Some of these foreign explorers died of thirst in the desert
or were robbed and slain by fierce Tuareg warriors, while
Timbuktu’s mirage-like renown – no doubt enhanced by
thirst-crazed, feverish imaginations – reached glittering
proportions in the consciousness of 19th century Europe.

Scottish explorer Gordon Laing was the first European to
arrive in Timbuktu in 1826, but he did not live to tell the
tale, perishing at the hands of desert robbers.

It was not until two years later that Frenchman Rene-Auguste
Caillie became the first European to see Timbuktu and survive to
recount what he saw. “I have been to Timbuktu!” he is said to
have breathlessly told the French consul in Tangier after he
staggered back from his epic Saharan journey.

But after all his dreams of glittering minarets and palaces
filled with gold, Caillie was disappointed to find in Timbuktu
what it has largely remained for centuries: a dun-coloured town
in a dun-coloured desert.

“I had a totally different idea of the grandeur and wealth
of Timbuctoo,” he wrote. “The city presented, at first view,
nothing but a mass of ill-looking houses, built of earth.
Nothing was to be seen in all directions, but immense quicksands
of yellowish white colour,” he added.

This initial sense of disappointment for outsiders, the myth
not matching reality, seems to have traversed the centuries.

Normally loquacious Irish rocker and anti-famine campaigner
Bob Geldof is reported to have been somewhat underwhelmed when
he arrived in Timbuktu during the 1980s. “Is that it?” he said.

(Reporting by Bate Felix and Maria Golovnina, writing by Giles
Elgood, editing by Peter Millership)

By the time special forces had cleared the In Amenas complex at the weekend, nearly 70 hostages and militants lay dead. Some Western leaders seemed unaware of what was happening on the ground, complaining that they had not been consulted about the decision to go in with foreign hostages’ lives at stake.

For the Algerian leadership, the decision to attack with helicopters, snipers and special forces to tackle insurgents who had threatened to blow up the plant was apparently an easy one and the operation was seen as a success that has boosted the prestige of the armed forces.

“We are proud of our army’s special forces and the whole world has understood that this reaction was the only possible response,” Prime Minister Abdelmalek Sellal said. “When the security of the country is at risk, you have to be firm.”

That reaction was clearly conditioned by the turbulent recent history of a country that jealously guards its sovereignty and sees those it regards as Islamist “terrorists” as a threat that must be snuffed out. And with a war in progress in neighboring Mali, it is a threat that looms larger now.

Algeria fought a bitter war of independence against France in the 1950s and an even bloodier civil war against Islamist insurgents in the 1990s that cost 200,000 lives. Its leadership is secretive, authoritarian and determined to preserve the state in the face of Islamist unrest.

Oil and gas account for the bulk of Algeria’s export earnings and the funds enable the government to subsidize food and fuel prices and cushion the effect of unemployment, particularly among the young.

OIL WEALTH

Hydrocarbon wealth enabled Algeria to dodge the upheavals of the Arab Spring and experts believe that any further Islamist attacks on its oil and gas industry will be met with force by a security establishment determined to maintain the status quo.

More Islamist attacks are likely, but they are expected to be smaller, with foreign workers at risk from shootings and bombings. The security forces will deal with them firmly, said Richard Jackson, Deputy Director of Violent Risk Forecasting at the Exclusive Analysis consultancy.

“They are likely to respond in a forceful and rapid way to any future events,” he said.

Prime Minister Sellal has been at pains to stress that the problem his country faces is not related to Islam, but to terrorism and banditry.

“I particularly call on Arab countries, in order to tell them that we are not facing an Islamic issue, but terrorists and mercenaries,” he said.

“We must protect our religion, our civilization, which terrorists are destroying. How can we imagine that such an acts are perpetrated on behalf of Islam. These crimes will not be allowed in Algeria.”

The leader of the group behind the In Amenas attack, Mokhtar Belmokhtar, is known to be active in cigarette smuggling and kidnap and ransom, which many see as undermining any claim to purely religious motivation.

MILITARY RESPONSE

Some in Algeria suggest, however, that the military response to religious radicalism may not be effective on its own. A repositioning of religious values away from those espoused by foreign teachers may be necessary.

“Military combat against Salafi jihadists is needed, but it is not enough. We must also combat their ideology by returning to our values, our religious references,” said Mohamed Mouloudi, an independent analyst on Islamic issues.

“Algeria doesn’t need Saudi muftis to tell its citizens what is permitted and what is not, as is the case now. We must reform our education system, we must reform the way the government handles religion. If not, we will very soon become an annexe of Salafi ideology.”

Although the In Amenas attack was plotted in Mali and involved foreign jihadists, Al Qaeda in the Islamic Maghreb can be found in Algeria.

Algerian libraries today contain religious texts originating mainly in Saudi Arabia, written by scholars who endorse the hard-line Wahhabi ideology, Mouloudi said.

“I am not saying they are all terrorists, but I am saying the ideas they promote clash with our values and our culture,” he said.

In the meantime, however, one beneficiary of the In Amenas operation may be the Algerian military, whose political influence could be boosted as the country approaches an election in which it is unclear whether Abdelaziz Bouteflika, in power since 1999, will stand.

“The successful military assault has boosted the Algerian army’s popularity among the people, which is an important factor 15 months ahead of a presidential election in which the military could play a major role in promoting a candidate,” said an Algerian analyst, who asked not to be named because of the sensitivity of the issue.

(Additional reporting by Lamine Chikhi; editing by Janet McBride)

Britain and Sweden appeared to buck the trend, however, with the number of people visiting shops on Wednesday, the day when clearance sales traditionally start, well up on last year and sales volumes high.

In southern Europe, where the economic crisis has hit hardest, sales were down, in some cases quite substantially, according to an informal Reuters survey.

In Greece, whose economy has been shrinking for five years, retail turnover in December is expected to have fallen by about one fifth compared to a year ago, according to Vassilis Korkidis, chairman of the country’s retail trade association.

“Unfortunately, yet another year has been marked by poor Christmas sales. I hope that 2013 will put an end to the economic war we have been fighting for five straight years now,” Korkidis told a Greek television station.

Athens’ main shopping streets were buzzing with people before Christmas. But many shopkeepers complained that families merely came for a walk to enjoy the warm, sunny weather.

BIG REDUCTIONS

Spain’s biggest department store, El Corte Ingles, has not officially started its winter sales, but is already offering discounts on selected items such as flat-screen televisions.

Shopkeepers were expected to offer big reductions when clearance sales officially start next month in an attempt to generate some interest from customers after two straight years of falling retail sales.

“The Christmas campaign didn’t take off the way it was expected to and we know sales are down compared to 2011 though we don’t have the figures yet,” said Ainhoa Garcia, spokeswoman for the Spanish Commerce Confederation.

For Italy, another victim of the euro zone crisis, this Christmas will go down as “the worst in the last 10 years”, according to the Codacons consumer organization, with spending down by as much as 20 percent compared with a year ago.

Italian families were buying fewer and cheaper presents and even recycling last year’s Christmas decorations.

An exception to the downturn was spending on food, which rose 5 percent as Italians remained reluctant to give up on elaborate Christmas meals.

In France, a special promotion by supermarket group Intermarche resulted in the sale of 45,000 tins of caviar, three times more than last year.

But with a month of winter sales beginning on January 9, the outlook is less rosy. Only 48 percent of shoppers are planning to participate, according to a poll by market research firm Harris Interactive.

In relatively prosperous Germany, the outlook was better. Shoppers had waited until the last minute before making their purchases, but a sharp pickup in the week before Christmas was expected to continue into the New Year, the German retail association said.

SALES MOMENTUM

“More and more often, Christmas presents are being bought only just before Christmas,” said Stefan Genth, head of the HDE retail association, which represents 100,000 members.

Revenues from Christmas shopping are expected to amount to about 80.4 billion euros, an increase of 1.5 percent from the year-earlier period, HDE said.

“We expect sales momentum to continue between Christmas and New Year,” HDE spokesman Stefan Hertel said.

Post-Christmas clearance sales in Britain appeared to get off to a strong start, as cash-strapped shoppers rushed to grab bargains.

Initial reports indicated footfall had risen over 20 percent across the country on Boxing Day, the day after Christmas and the traditional start for clearance sales.

More retailers than ever before had begun sales on Boxing Day to maximize the time they were open for shoppers, said a spokesman for the British Retail Consortium.

“Customers are extremely savvy, even more so in these difficult conditions,” he said.

Leading British department store chains like Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz), Debenhams (DEB.L: Quote, Profile, Research, Stock Buzz) and John Lewis JLPLC.UL began clearance sales online on Christmas Eve.

John Lewis said online sales in the first hour were up 70 percent on 2011, while sales on Christmas Day rose 40 percent.

Gisela Bruem-Cedergren, sales chief at department store Ahlens City in Stockholm, said turnover and number of visitors on the first day of post-Christmas sales hit record highs.

“We hit a record, the day’s total turnover was our best ever for a Boxing day,” she said in the Swedish capital.

“When we opened, customers ran straight to the perfume department near the entrance, grabbing bottles at random so they flew all over the place,” she said. “We were a bit shocked.”

(Reporting by Rosalba O’Brien and natalie Huet in London, Edward Taylor in Frankfurt, Dominique Vidalon in Paris, Danilo Masoni in Milan, Harry Papachristou in Athens, Clare Kane in Madrid and Anna Ringstrom in Stockholm; Editing by Erica Billingham)

The Muslim Brotherhood called for the rally after a violent confrontation between Islamists and the liberal, secular opposition in Egypt’s second city last week ended with a Muslim preacher besieged inside his mosque for 14 hours. Rival factions were armed with clubs, knives and swords.

The run-up to the referendum on a new draft constitution has been marked by often violent protests in which at least eight people have died.

The constitution is backed by President Mohamed Mursi and his Islamist allies as a vital step in Egypt’s transition to democracy almost two years after the fall of Hosni Mubarak.

The opposition, facing defeat in the referendum, has called for a “no” vote against a document it views as leaning too far towards Islamism.

The first day of voting on December 15 resulted in a 57 percent majority in favor of the constitution. The second stage on Saturday is expected to produce another “yes” vote as it covers regions seen as more conservative and likely to back Mursi.

The National Salvation Front, the main opposition coalition, said a “no” vote meant taking a stand against attempts by the Muslim Brotherhood, Mursi’s political base, to dominate Egypt.

“For the sake of the future, the masses of our people should strongly and firmly say ‘no’ to injustice and ‘no’ to the Brotherhood’s dominance,” the Front said in a statement.

POLL WITHIN TWO MONTHS

The constitution must be in place before elections can be held. If it passes, the poll should be held within two months.

Mursi and his backers say the constitution is needed to advance Egypt’s transition from decades of military-backed autocratic rule. Opponents say it ignores the rights of women and of minorities, including the 10 percent of Egyptians who are Christian.

Demonstrations erupted when Mursi awarded himself sweeping powers on November 22 and then fast-tracked the constitution through a drafting assembly dominated by his Islamist allies and boycotted by many liberals.

The referendum is being held over two days because many of the judges needed to oversee polling stayed away in protest. In order to pass, the constitution must be approved by more than 50 percent of those voting.

Adding to the uncertainty as the final round of the referendum approaches, Egypt’s chief prosecutor suddenly announced that he was retracting his decision to quit.

Prosecutor Talaat Ibrahim, appointed by Mursi when he assumed his new powers, said he had changed his mind because his resignation on Monday was under duress.

Ibrahim had quit after more than 1,000 members of his staff gathered at his office to demand he step down because his appointment by the president, rather than by judicial authorities, threatened the independence of the judiciary.

After he announced he was staying, several prosecutors announced they were suspending work and would stage an open-ended protest outside Ibrahim’s office.

(Writing by Giles Elgood; Editing by Andrew Heavens)

The rally announced by the Muslim Brotherhood responds to a violent confrontation between Islamists and their liberal and secular opponents in Egypt’s second city last week that ended with a Muslim preacher besieged inside his mosque for 14 hours.

The run-up to the referendum on the Islamist-backed constitution, billed as a major impetus for Egypt’s democratic transition, has been marked by often violent protests in which at least eight people have died.

The first day of voting last weekend resulted in a 57 percent vote in favor of the draft basic law, according to official media. The final stage on Saturday is expected to endorse that result as it covers parts of Egypt, particularly rural areas, even more sympathetic to the Islamist cause.

Last week’s clashes in Alexandria involved protesters armed with clubs, knives and swords.

“What happened last Friday reveals the ugly face of secularism,” said a spokesman for the Muslim Brotherhood, the Islamist group which backed President Mohamed Mursi in his presidential election victory in June.

Opponents of Mursi staged protests in Cairo on Tuesday evening but numbers were down on previous demonstrations.

Several hundred protesters outside the presidential palace chanted “Revolution, revolution, for the sake of the constitution” and called on Mursi to “Leave, leave, you coward!”.

STONE-THROWING

A protester at the presidential palace, Ahmed Mahmoud, 24, said: “We are here to remind Mursi that we will not give up our revolution and won’t leave until he leaves.”

Shortly after midnight, a few hundred protesters who had planned to spend the night in tents set up around the palace were attacked with stones.

“Unknown people threw stones at us from behind the walls the army had built at all entrances to the palace, and some of the protesters were injured in the leg and head,” protester Karim el-Shaer told Reuters.

If the constitution is passed, national elections can take place early next year, something many hope will help end the turmoil that has gripped the Arab world’s most populous nation since the overthrow of Hosni Mubarak almost two years ago.

But the closeness of the first day of voting and the low turnout suggest more difficulties ahead for Mursi as he seeks to rally support for difficult economic reforms needed to bring down the budget deficit, such as raising taxes and cutting fuel subsidies.

Mursi and his backers say the constitution is needed to advance Egypt’s transition from decades of military-backed autocratic rule. Opponents say it is too Islamist and ignores the rights of women and of minorities, including 10 percent of Egyptians who are Christian.

Demonstrations erupted when Mursi awarded himself extra powers on November 22 and then fast-tracked the constitution through an assembly that is dominated by his Islamist allies and boycotted by many liberals.

The referendum has had to be held over two days because many of the judges needed to oversee polling staged a boycott in protest. In order to pass, the constitution must be approved by more than 50 percent of those voting.

(Additional reporting by Yasmine Saleh and Edmund Blair; Writing by Giles Elgood; Editing by Mark Heinrich)

Islamist President Mohamed Mursi obtained a 57 percent “yes”
vote for the constitution in initial voting on Saturday, his
party said, less than he had hoped for.

The result is likely to embolden the opposition, which says
the law is too Islamist, although the second round is expected
to result in another “yes”, while underlining the deep divisions
that have riven Egypt since Hosni Mubarak’s fall.

On Monday, protesters broke out into cheers when the public
prosecutor Mursi appointed just last month announced his
resignation. They said it was a victory for the independence of
the judiciary.

But they are unlikely to win Saturday’s referendum second
round, to be held in districts seen as even more sympathetic
towards Mursi’s Muslim Brotherhood, which won elections held
after Mubarak was ousted in February 2011.

The opposition National Salvation Front said there were
widespread voting violations in the first round of the
referendum vote and urged organisers to ensure that the second
round was properly supervised.

It has called for protests across Egypt on Tuesday “to stop
forgery and bring down the invalid draft constitution” and wants
organisers to re-run the first round of voting.

In Cairo, the Front plans to hold demonstrations at Tahrir
Square, cradle of the revolution that toppled Mubarak, and
outside Mursi’s presidential palace, still ringed with tanks
after earlier protests.

“Down with the constitution of the Brotherhood,” the Front
said in a statement. “Down with the constitution of tyranny.”

The build-up to the first round saw clashes between
supporters and opponents of Mursi in which eight people died.
Demonstrations in Cairo have been more peaceful, although rival
factions clashed on Friday in Alexandria, Egypt’s second biggest
city.

On Monday, more than 1,300 members of the General
Prosecution gathered outside the office of Public Prosecutor
Talaat Ibrahim to demand that he leave his post.

Hours later, Ibrahim announced he had resigned and the crowd
cheered, “God is Great! Long live justice!” and “Long live the
independence of the judiciary!” witnesses said.

Official results of the referendum will come only after the
second round, but one newspaper calculated that out of every 100
Egyptians, 18 voted “yes”, 13 voted “no” and the rest did not
participate, buttressing opposition claims that Mursi had failed
to secure real backing.

The closeness of the first-round tally and low turnout give
Mursi scant comfort as he seeks to assemble support for
difficult economic reforms to reduce the budget deficit.

He will hold a further round of national unity talks with
political leaders on Tuesday, but the National Salvation Front
is expected to stay away, as it has in the past.

OPPOSITION BOOST

The lack of a clear result in the plebiscite so far has
complicated matters for Mursi, strengthening the fractious
opposition and casting doubt over the credibility of the
constitution, political analysts believe.

“This percentage … will strengthen the hand of the
National Salvation Front and the leaders of this Front have
declared they are going to continue this fight to discredit the
constitution,” said Mustapha Kamal Al-Sayyid, a professor of
political science at Cairo University.

Mursi would be likely to become more unpopular with the
introduction of planned austerity measures, polarising society
further, Sayyid told Reuters.

If the constitution passes next weekend, national elections
can take place early next year, something many hope will usher
in a much-needed period of stability in Egypt.

To tackle the budget deficit, the government needs to impose
tax rises and cut back fuel subsidies. Uncertainty surrounding
economic reform plans has already forced the postponement of a
$4.8 billion loan from the International Monetary Fund. The
Egyptian pound has fallen to eight-year lows against the dollar.

Mursi and his backers say the constitution is vital to
moving Egypt’s democratic transition forward. Opponents say the
document is too Islamist and ignores the rights of women and of
minorities, including Christians who make up 10 percent of the
population.

Demonstrations erupted when Mursi awarded himself extra
powers on Nov. 22 and then fast-tracked the constitution through
an assembly dominated by his Islamist allies and boycotted by
many liberals.

The referendum is being held over two days because many of
the judges needed to oversee polling staged a boycott in
protest. In order to pass, the constitution must be approved by
more than 50 percent of those casting ballots.

The Islamist leader won a 57 percent “yes” vote for the constitution in a first round of a referendum at the weekend, according to state media, a margin that was less than his party had hoped for and which is likely to embolden the opposition.

The second round, due to be held on Saturday, is expected to give another “yes” as voting will be in districts seen as even more sympathetic towards Islamists, which would mean the constitution should be approved.

The opposition National Salvation Front urged the organizers of the referendum to investigate what it said were widespread voting violations and ensure that the second round of balloting was properly supervised.

It called for protests across Egypt on Tuesday “to stop forgery and bring down the invalid draft constitution” and urged organizers to consider re-running the first round of voting.

Senior opposition politician Mohamed ElBaradei, a Nobel prize winner, used his Twitter account to call for “cancelling the notorious referendum and entering dialogue to mend the rift.”

The closeness of the first-round tally and the low turnout give Mursi scant comfort as he seeks to assemble support for difficult economic reforms to reduce the budget deficit.

One newspaper calculated that in the first round, out of every 100 Egyptians, 18 voted “yes”, 13 voted “no” and the rest did not participate, buttressing opposition claims that Mursi had failed to secure real backing.

BUILDING CONSENSUS

Simon Kitchen, a strategist at Egyptian investment bank EFG-Hermes, said much would depend on whether Mursi took the result as “an endorsement of his policies … or does he recognize that he may need to spend more time building consensus ahead of major policy changes?”

“I think he will continue to push ahead on reforming taxes and subsidies because, at this stage, Egypt has little choice but to make such reforms,” he said.

However, some analysts said they remained concerned by voting patterns that seemed to show a deepening sectarian divide, notably in Alexandria, Egypt’s second city, where tensions between Christians and conservative Muslims run high.

The result of the first round of voting cast serious doubts on the credibility of the constitution, said Mustapha Kamal Al-Sayyid, a professor of political science at Cairo University.

“This percentage … will strengthen the hand of the National Salvation Front and the leaders of this Front have declared they are going to continue this fight to discredit the constitution,” he said.

“The polarization is far from being ended,” Sayyid told Reuters. “The unpopularity of Mursi will increase with economic measures he is planning to introduce.”

If the constitution passes, national elections can take place early next year, something that many hope will usher in the stability that Egypt has lacked since the fall of Hosni Mubarak nearly two years ago.

Economists said the parliamentary election timetable could affect the timing of government reforms, encouraging Mursi to delay tougher measures to avoid scaring away voters.

To rein in a crushing budget deficit, the government needs to raise revenues with tax rises and to cut back on subsidies on fuel, one of the biggest drains on state coffers.

UNPOPULAR MEASURES

Both will be unpopular, and the government has outlined plans to target fuel subsidies more directly at the poor, in a nation where everyone has become used to cheap energy.

Reflecting investors’ concerns, the cost of insuring Egypt’s debt against default climbed to trade around three-and-a-half month highs, rising to 490 basis points on Monday from 480 on Friday, the day before the vote.

Uncertainty surrounding economic reform plans has already forced the postponement of a $4.8 billion loan from the International Monetary Fund. The Egyptian pound has fallen to eight-year lows against the dollar.

Mursi and his backers say the constitution is vital to moving Egypt’s democratic transition forward. Opponents say the document is too Islamist and ignores the rights of women and of minorities, including Christians who make up 10 percent of the population.

The build-up to the forst-round vote was marred by violent protests. Demonstrations erupted when Mursi awarded himself extra powers on November 22 and then fast-tracked the constitution through an assembly dominated by his Islamist allies and boycotted by many liberals.

Despite earlier violence, the vote passed off calmly, although unofficial tallies indicated turnout was around a third of the 26 million people eligible to vote this time. The referendum is being held over two days because many of the judges needed to oversee polling staged a boycott in protest.

Violence in Cairo and other cities plagued the run-up to the referendum. At least eight people were killed when rival factions clashed during demonstrations outside the presidential palace earlier this month.

In order to pass, the constitution must be approved by more than 50 percent of those casting ballots. There are 51 million eligible voters in the nation of 83 million.

(Additional reporting by Yasmine Saleh and Edmund Blair; Writing by Giles Elgood; editing by Anna Willard)

Voting begins in a referendum on a divisive draft basic law that has pitted Islamist supporters of President Mohamed Mursi against a liberal, secular and Christian opposition in often bloody clashes in Cairo and other cities.

The opposition says the constitution is too Islamist and tramples on minority rights. Mursi’s supporters say the charter is needed if progress is to be made towards democracy nearly two years after the fall of military strongman Hosni Mubarak.

In Alexandria on Friday, tensions boiled over into a street brawl between rival factions armed with clubs, knives and swords. Several cars were set on fire and a Muslim preacher who had urged people to vote “yes” to the constitution was trapped inside his mosque by angry opposition supporters.

In the capital, Cairo, both sides made low-key final efforts to rally supporters.

Flag-waving Islamists gathered peacefully at one of the main mosques, some shouting “Islam, Islam” and “We’ve come here to say ‘yes’ to the constitution”.

Opposition supporters – who have been urged to vote “no” by their leaders – assembled outside the presidential palace.

The building remains ringed with police, soldiers and tanks after street clashes caused at least eight deaths earlier this month in violence prompted by Mursi’s decision to award himself sweeping powers in order to ram through the new charter.

As darkness fell, there appeared to be more bystanders and street vendors present than opposition demonstrators. A woman addressed the crowd through a loudhailer, shouting obscenities about Mursi, but many in her audience seemed more interested in drinking tea or having their picture taken in front of a tank.

“I don’t like Mursi,” said Moustafa Ahmed, 25, a teacher. “But I haven’t decided what to vote for tomorrow so I decided to come here to listen to the protesters and chat to them one last time.”

TWO DAYS OF VOTING

The referendum will be held on two days – this Saturday and next – because there are not enough judges willing to monitor all polling stations after some in the judiciary said they would boycott the vote.

Egyptians are being asked to accept or reject a constitution that must be in place before a parliamentary election can be held next year – an event many hope can steer the country towards stability.

The measure is generally expected to pass, given the well-organized Muslim Brotherhood’s record of winning elections since the fall of Mubarak. Many Egyptians, tired of turmoil, may simply fall in line and vote “yes”.

If the constitution is voted down, a new assembly will have to be formed to draft a revised version, a process that could take up to nine months.

Just over half of Egypt’s electorate of 51 million will vote in the first round in Cairo and other cities. Polling stations open at 8 a.m. (0600 GMT) and close 12 hours later.

Official results will not be announced until after the second round, though it is likely that details will emerge after the first round that will give an idea of the overall trend.

To provide security for the vote, the army has deployed about 120,000 troops and 6,000 tanks and armored vehicles to protect polling stations and other government buildings

While the military backed Mubarak and his predecessors, it has not intervened on either side in the present crisis.

The charter has been criticized by some overseas bodies.

The International Council of Jurists, a Geneva-based human rights group, said it falls short of international standards on the accountability of the armed forces, the independence of the judiciary, and recognition of human rights.

United Nations human rights experts said the draft should be reviewed to ensure that Egypt meets its obligations under international law on equality and women’s rights.

(Additional reporting by Ahmed Fahm and Abdel Rahman Youssef in Alexandria; Writing by Giles Elgood; Editing by Alastair Macdonald)

Dozens of activists fought with clubs and swords, witnesses
said, and cars were set alight on the streets of Egypt’s second
biggest city on the eve of a vote that Mursi hopes will bring an
end to the country’s worsening political crisis.

A large crowd of anti-Mursi protesters armed with knives and
clubs later surrounded an Alexandria mosque, trapping inside a
preacher who had criticised those planning to oppose the
constitution when voting begins on Saturday.

In Cairo, flag-waving pro-Mursi Islamists staged a final
rally before the referendum, but the gathering outside one of
the capital’s main mosques was peaceful.

Members of the liberal, secular and Christian opposition
gathered outside the presidential palace to demonstrate against
a proposed constitution they say is too heavily influenced by
Islamists.

Cairo and other cities have often seen violent
demonstrations over the past three weeks since Mursi assumed
sweeping new powers to push through the constitution, which he
sees as a vital element of Egypt’s transition to democracy after
the overthrow of autocratic predecessor Hosni Mubarak last year.

At least eight people have died and hundreds have been
injured, and a leading opposition figure has warned of more
violence during the voting.

The referendum, to be held on two days because there aren’t
enough judges willing to monitor all polling stations, asks
Egyptians to accept or reject a basic law that must be in place
before national elections can be held early next year – an event
many hope can steer the country towards stability. The
government said Saturday would be a holiday to enable people to
vote.

To bolster support for the constitution, Islamists, who
propelled Mursi to power in June’s presidential election,
assembled at a mosque near the president’s palace in Cairo.

“Islam, Islam,” they chanted. “We’ve come here to say ‘yes’
to the constitution.”

For the opposition, Nobel prize winner Mohamed ElBaradei
issued a statement urging Mursi to cancel the referendum “before
it is too late”.

Amr Moussa, a former head of the Arab League also prominent
in the opposition, called on Egyptians to vote “no”.

TIRED OF TURMOIL

The measure is nevertheless expected to pass, given the
well-organised Muslim Brotherhood’s record of winning elections
since the fall of Mubarak. Many Egyptians, tired of turmoil, may
simply fall in line.

The first round of voting on Saturday will take place in
Cairo and other major cities. Official results won’t be
announced until after the second round, though it is likely that
details will emerge to give a good steer on the first-day
figures, which are expected to show a strong vote in favour.

To provide security for the vote, the army has been deployed
in force, with state television showing ranks of soldiers
receiving their orders to protect polling stations and other
government buildings. About 120,000 troops and 6,000 tanks and
armoured vehicles will be deployed.

While the military backed Mubarak and his predecessors, it
has not intervened on either side in the present crisis.

The opposition says the constitution does not reflect the
aspirations of all 83 million Egyptians because it is too
Islamist and tramples on minority rights, including those of the
Christian community. Mursi’s supporters say the constitution is
needed if progress is to be made towards democracy.

The charter has been criticised by some overseas bodies.

The International Council of Jurists, a Geneva-based human
rights group, said it falls short of international standards on
the accountability of the armed forces, the independence of the
judiciary, and recognition of human rights.

United Nations human rights experts said the draft should be
reviewed to ensure that Egypt meets its obligations under
international law on equality and women’s rights.

While the opposition is telling its supporters to vote “no”,
it has also threatened to boycott proceedings if guarantees for
a fair vote are not met.

Many ordinary Egyptians are well aware of how contentious
the constitution is, but simply want to get it out of the way so
the country can move ahead.

“I am so tired of politics,” said Ahmed Shawki, who works in
downtown Cairo. “Can’t we have a referendum on stability instead
of the constitution and then all Egyptians work together to
achieve stability? A faraway dream.”

Cairo and other cities have seen a series of often violent
demonstrations over the past three weeks since Mursi assumed
sweeping new powers to push through the constitution, which he
sees as a vital element of Egypt’s transition to democracy.

At least eight people have died and hundreds have been
injured and a leading opposition figure warned of more blood on
the streets during the voting this Saturday and next on a draft
the opposition says is too Islamist.

The referendum asks Egyptians to accept or reject a basic
law that has to be in place before national elections can be
held early next year – an event many hope can steer the Arab
world’s most populous nation towards stability.

To bolster support for the constitution, the Islamist Muslim
Brotherhood, which propelled Mursi to power in June’s
presidential election, will assemble at a mosque not far from
the president’s palace in Cairo.

A little later in the day, the liberal, secular and
Christian opposition will rally in favour of a vote against the
basic law outside the palace and in Tahrir Square, symbolic
centre of the revolt that toppled Mubarak in 2011.

“During the referendum, I believe there will be blood and a
lot of antagonism, so it is not right to hold a referendum,”
Ahmed Said of the National Salvation Front told Reuters.

Despite the opposition push for a “no” vote, the measure is
expected to pass given the well-organised Muslim Brotherhood’s
record of winning elections since the fall of Mubarak. Many
Egyptians, tired of turmoil, may simply fall in line.

SOLID INDICATION

The first round of voting on Saturday will take place in
Cairo and other major cities and could presage the overall
result if it is a fairly solid “yes” as many expect.

To provide security for the vote, the army has been deployed
in force, with state television showing ranks of soldiers
receiving their orders to protect polling stations and other
government buildings. About 120,000 troops and 6,000 tanks and
armoured vehicles will be deployed.

While the military backed Mubarak and his predecessors, it
has not intervened on either side in the present crisis.

The vote has proved hugely controversial, with supporters of
the Islamist Muslim Brotherhood fighting on the streets with
opposition groups.

The opposition says the constitution does not reflect the
aspirations of all 83 million Egyptians because it is too
Islamist and tramples on minority rights, including those of the
Christian community. Mursi’s supporters say the constitution is
needed if progress is to be made towards democracy.

While the opposition is telling its supporters to vote “no”,
it has also threatened to boycott proceedings if guarantees for
a fair vote are not met. But staying away from the process could
risk a loss of credibility, political experts say.

Many ordinary Egyptians are well aware of how contentious
the constitution is, but simply want to get it out of the way so
the country can move ahead to a more stable future.

“Do I like the constitution?” asked Ahmed Helmy, a
35-year-old engineer in Tahrir Square. “No. But I want the
referendum to take place so we can get out of this prolonged
transitional period that’s making me and millions of Egyptians
wish we had left the country.”