The results of the first phase of the three-stage poll which could bring the Muslim Brotherhood closer to power were due to start coming out on Wednesday, but the military council which took over from ousted President Hosni Mubarak has yet to step aside.

Millions of voters went to the polls in a mostly peaceful two-day vote, though the calm was shattered on Tuesday night when nearly 80 people were wounded in violence focused around a Cairo sit-in protest by activists demanding an end to army rule.

The election for Egypt’s lower house is due to conclude in early January but early results were expected to trickle out on Wednesday after a high turnout and only minor infringements were reported.

State television broadcast live footage of the vote count across Egypt, which has not seen an election this free in the decades since army officers overthrew the monarchy in 1952.

Though the Muslim Brotherhood went into the polls stronger than nascent secular parties, analysts say it is hard to predict the outcome given that most of the electorate are casting their ballots for the first time.

Election monitors reported logistical hiccups and some campaign violations but no serious violence to disrupt proceedings. Election posters and banners festooned towns and cities while judges officiated under the eye of troops, police and election monitors.

The outcome of the election in one of the Middle East’s most influential powers will help shape the future of a region convulsed by uprisings against decades of autocracy.

Though it did not start the Egyptian uprising, the Muslim Brotherhood has emerged as a major beneficiary of the revolt. The group, outlawed by Mubarak and his predecessors, is now in sight of a role in shaping the country’s future.

The Freedom and Justice Party, the Muslim Brotherhood’s political wing established earlier this year, said Egypt’s new parliament should form the government.

“A government that is not based on a parliamentary majority cannot conduct its work in practice,” FJP head Mohamed Mursi told reporters during a tour of polling stations in the working-class district of Shubra in Cairo.

“Therefore we see that it is natural that the parliamentary majority in the coming parliament will be the one that forms the government,” said Mursi, adding:

“We see that it is better for it to be a coalition government built on a majority coalition in the parliament.”

PARLIAMENT AT CENTRE STAGE

It was only last week that the military council appointed Kamal al-Ganzouri, a 78-year-old veteran of the Mubarak era, to form a cabinet to replace the government of Essam Sharaf, which resigned in the face of protests against military rule.

A military council member said at the weekend the new parliament would not have the authority to dismiss Ganzouri’s government or form a new one. Yet observers question whether the council will be able to resist the will of a chamber elected in a fair vote, especially if voting carries on smoothly.

A senior figure in the once-banned Muslim Brotherhood said its FJP had done well in the voting so far.

“The Brotherhood party hopes to win 30 percent of parliament,” Mohamed El-Beltagy told Reuters.

The leader of the ultra-conservative Salafi Islamist al-Nour Party, which hopes to siphon votes from the Muslim Brotherhood, said organisational failings meant his party had underperformed.

But he told Reuters the party still expected to win up to half of second city Alexandria’s 24 seats in parliament and, nationwide, 70 to 75 of the assembly’s 498 elected seats.

The success of the first phase has deflected criticism faced by the military council, which has been under pressure from street protesters over what they see as the generals’ attempts to maintain power and privilege in the post-Mubarak era.

The military council has said turnout would exceed more than 70 percent, though the FJP’s Mursi said indications showed a lower figure of 40 percent.

In one of the military’s first reactions to the election’s first phase, General Ismail Atman, a ruling army council member, was quoted by Al-Shorouk newspaper as saying the poll showed the irrelevance of the Tahrir Square protest.

Last week was Egypt’s most violent since Mubarak was ousted: 42 people were killed in clashes triggered by the protests against the military council, mostly in streets around Tahrir. The Tahrir sit-in protest against the military council entered its 12th day on Wednesday.

ELBARADEI BLAMES “THUGS”

Tuesday night’s violence in Tahrir erupted when youths who could not be identified had tried to enter the square, one of the protest organisers said.

In the ensuing trouble, petrol bombs were thrown in the direction of the protesters and guns were fired. Twenty-seven of the wounded were taken to hospital, the official MENA news agency reported.

In criticism of the military-run government, leading reformist politician Mohamed ElBaradei wrote on his Twitter feed: “Thugs are now attacking the protesters in Tahrir. A regime that cannot protect its citizens is a regime that has failed in performing its basic function.”

The term thugs was often used to describe violent pro-Mubarak elements who disrupted elections in the rigged polls of the past and who used camels in the final days of the Mubarak era to try and intimidate protesters in Tahrir Square.

Many Egyptians were worried elections would be bloody. Instead, the vote won international praise.

U.N. Secretary-General Ban Ki-moon congratulated Egyptians on the first stage of the election and the “generally calm and orderly manner in which voting took place”, a statement from his office said.

Les Campbell, of the Washington-based National Democratic Institute, one of many groups monitoring the poll, said it was “a fair guess” that turnout would exceed 50 percent, far above the meagre showings in rigged Mubarak-era elections.

(Additional reporting by Marwa Awad in Alexandria, Shaimaa Fayed in Damietta and Tom Perry, Patrick Werr, Peter Millership and Edmund Blair in Cairo; Writing by Tom Perry; Editing by Peter Millership and Ralph Gowling)

Many have been intrigued by the Occupy Wall Street movement
against financial inequality that started in a New York park and
expanded across America from Tampa, Florida, to Portland,
Oregon, and from Los Angeles to Chicago.

Hundreds of activists gathered a month ago in the Manhattan
park two blocks from Wall Street to vent their anger at what
they see as the excesses of New York financiers, whom they blame
for the economic crisis that has struck countless ordinary
Americans and reverberated across the global economy.

In the U.S. movement, Arab nations see echoes of this year’s
Arab Spring uprisings. Spaniards and Italians see parallels with
Indignados (indignant) activists, while voices in Tehran and
Beijing with their own anti-American agendas have even said this
could portend the meltdown of the United States.

Inspired by the momentum of the U.S. movement, which started
small but is now part of U.S. political debate, activists in
London will gather to protest outside the London Stock Exchange
on Oct. 15 on the same day that Spanish groups will mass on
Madrid’s Puerta del Sol square in solidarity.

“American people are more and more following the path chosen
by people in the Arab world,” Iran’s student news agency ISNA
quoted senior Revolutionary Guards officer Masoud Jazayeri as
saying. “America’s domineering government will face uprisings
similar to those in Tunisia and Egypt.”

Chinese newspapers splashed news about Occupy Wall Street
with editorials blaming the U.S. political system and denouncing
the Western media for playing down the protests.

“The future of America stands at a crossroads. Presuming
that effective measures to relieve the social mood and
reconstruct justice cannot be found, it is not impossible that
the Occupy Wall Street movement might be the final straw under
which America collapses,” said a commentary in the Global Times.

“This movement has uncovered a scar on American society, an
iceberg of accumulated social conflicts has risen to the
surface,” said the commentary in the tabloid, which is owned by
the Communist Party mouthpiece, the People’s Daily.

“THIS IS TAHRIR SQUARE”

In Cairo, Ahmed Maher, a founder and leading member of
Egypt’s April 6 Youth Movement which helped to topple autocrat
Hosni Mubarak, said it was in contact with several groups
organising the anti-Wall Street demonstrations.

“A few days ago we saw a banner in New York that said ‘This
is Tahrir Square’,” Maher said, referring to the Cairo square
that became the epicentre of Egypt’s revolution.

“The Arab Spring has definitely inspired the burst of
protests in the United States and Europe.”

Others noted differences between Arab protesters and U.S.
protesters, branded by one Republican presidential candidate as
“anti-American” and so jealousy-ridden that they wanted to “take
somebody else’s … Cadillac”.

“The Arab protests started with requests for reform but
quickly transformed into demands for governments to leave, or at
least their leaders,” said Abdulaziz al-Uwaisheg, columnist in
Saudi daily al-Watan. “The American protest is against specific
policies … It did not ask to change the government.”

Spanish media have devoted daily coverage to Occupy Wall
Street, dubbing participants “Indignados in Manhattan”, with
left-leaning newspapers saying the U.S. protesters were inspired
by Spain’s own disenchanted youth-led grouping.

“Occupy Wall Street is one more branch of a global
movement,” said Veronica Garcia, a 40-year-old lawyer involved
in the Spanish demonstrations.

MARCHES INSPIRED BY MOVEMENT

While Spain’s “Indignados” have poured much of their anger
so far on politicians, Garcia said Saturday’s Madrid march was
likely to focus more on bankers.

In London, which was hit by rioting and looting by
disaffected people in early August, protesters were using social
media like Facebook and Twitter to plan their Stock Exchange
protest on Saturday.

The Occupy London protest aims to draw attention to “the
economic systems that have caused terrible injustices around the
world”, according to their website.

“Bankers have got off scot-free whilst the people of this
country are being punished for a crisis they did not create,” a
statement on the website said, echoing the chant taken up by
U.S. marchers: “We are the 99 percent.”

Unions, which organised protests against austerity moves in
debt-stricken Greece, welcomed the New York protests.

“It’s optimistic because we haven’t seen such protests
before,” Greek public sector unionist Despina Spanou told
Reuters. “There is no coordination so far because most of this
is spontaneous, but we cannot rule anything out.”

Newspapers around the world have sought to identify the true
motor of discontent driving the Occupy Wall Street movement,
with the Korea Herald seeing an historic dimension reflecting
the civil rights movement and anti-Vietnam War rallies.

“But perhaps the closest historical parallel is with the
Populist movement of the 1890s, which, like Occupy Wall Street,
was a broad, economics-driven revolt that targeted a predatory
class of corporate capitalists – the robber barons of the Gilded
Age,” the newspaper said.

“THERE’S SOMETHING HAPPENING HERE”

Japan’s Kyodo news agency ran an interview from New York
with organiser Kalle Lasn who said he hoped that “Occupy Wall
Street” would inspire Japan’s jobless youth.

“Is there some beginning of some kind of ‘Occupy Tokyo’ or
‘Occupy Marunouchi’, something like that happening in Japan
right now or not?” Kyodo quoted Lasn as saying, referring to the
Marunouchi business district in Tokyo.

The Occupy Wall Street protests across the United States
with their focus on banking bailouts and unfairness appeared to
present a dilemma for Russian Prime Minister Vladimir Putin.

The protests support one Kremlin agenda by underscoring the
economic troubles of Moscow’s Cold War foe, but could also send
a signal encouraging street protests — not what Putin wants as
he heads toward a second stint as president in a March vote.

This July, Putin said the United States was “acting like
hooligans” in the global economy. In August, he said the United
States was living beyond its means “like a parasite”.

Putin and President Dmitry Medvedev have not spoken publicly
about the protests, but state-run TV stations they use to shape
opinion seem to have found a way around the contradiction.

Footage of crowds protesting against perceived corporate
greed and government connivance echoed the emphasis on U.S.
economic inequality that was a Soviet-era propaganda staple.

Such footage may also back up Putin’s argument for a tight
state rein on Russia’s corporate world — and his colourful
depictions of the United States as a flagging, sometimes
dangerously irresponsible financial power.

At the same time, news footage often focusing on outspoken,
outlandishly dressed participants in the U.S. protests appeared
aimed at lending the crowds a circus-like look that could be to
discourage Russians from trying this at home.

The Chinese, however, have not been so subtle, using the
movement to fire repeated broadsides at the capitalist system.

“The Occupy Wall Street movement was sparked by the extreme
disparity between the rich and the poor,” the Hong Kong Economic
Journal said in its editorial.

“Now it looks like the spark is being turned into a great
fire that is spreading

Sites around the great pyramid at Giza, a Wonder of the Ancient World, the Sphinx and the cemetery at Sakkara have been nearly empty of tourists since a revolt started a month ago that ousted Hosni Mubarak, and now Egypt wants visitors to return.

“In terms of reviving tourism, the problem is currently Libya not us. The whole region is very hot right now,” Karim Mohsen, managing director of Sylvia Tours Egypt, said, referring to an uprising against Muammar Gaddafi in the western neighbor.

“Libya is on the border with Egypt and what people see happening there is terrible and therefore they’re afraid to come to the area,” Mohsen told Reuters, in a view reflected by other tour operators and guides who expected several more idle weeks.

Those trying to draw tourists back to cruises down the Nile and Egypt’s ancient artifacts want to turn the nation’s political turmoil to their advantage. One proposed slogan suggests the revolution is “One More Reason to Visit Egypt.”

Hundreds of students at Giza, visited by statesmen from Jimmy Carter to Napoleon and usually bustling with thousands of tourists, rallied at the weekend with “Egypt is Safe” signs, hoping to get the message over to the rest of the world.

“Please tell your friends not to fear the revolution. This is the new Egypt and it welcomes, you,” said Heba, 18.

Life in Egypt is still far from normal, with many schools still shut, weekly mass protests at Tahrir Square, a curfew and tanks with soldiers at key intersections in Cairo.

But in symbolic visits of confidence, prominent U.S. Congressmen John McCain and Joseph Lieberman appeared in the square at the weekend. They join British Prime Minister David Cameron and others who have recently made the trip.

CAMEL DRIVERS

Camel drivers offering rides, teenagers with their trotting ponies and carriages, pushy guides and others selling postcards and plastic sphinxes at Giza all bemoaned the drying up of coach tours and organized visits. “Please mister, tell them come to the new Egypt,” said camel driver Mohammed, 27.

Instead of foreigners, groups of Cairenes, many carrying national flags, took advantage of cut-price tickets to which they are entitled and explored their nation’s rich heritage at Giza that dates back to 2,600 B.C..

The struggle to the top chamber of the main pyramid, made from 2-1/2 million limestone blocks, was made easier by the lack of visitors. There were no line for tickets.

At Cairo’s citadel, a spectacular mediaeval fortress of crenellated towers built to fortify the city against Crusaders and which towers over Egypt’s capital, patriotic student volunteers were cleaning ramparts and painting its hand-rails.

“We organized this by ourselves,” said 15-year-old Leila, whose school along with others across the nation remains closed.

“It’s a message, This is the new Egypt,” she said, as an army of young people, keen to show their civic pride in a new democracy, also cleaned up in Tahrir Square, the nerve-center of anti-Mubarak protest, and across the neighborhoods of Cairo.

Some painted the pillars of overpasses in national colors.

For one of the few Westerners visiting the Citadel, barricades were raised and army soldiers surrounding a tank guarding the building, flicked V-for-victory signs and shouted: “Welcome to Egypt.”

Entering the turnstile of this usually crowded attraction, which has a spectacular view of Cairo and is the site of the Alabaster Mosque built by Mohammed Ali, one official said: “Two more visitors today, maybe 20 tomorrow.”

Dozens of tourists braved the revolution for the reopening of the world’s greatest collection of pharaonic treasures on February 20 and were welcomed with roses, as craftsmen meticulously mended artifacts damaged by looting.

However, the usually busy galleries of the Egyptian Museum, which houses the golden death mask of boy king Tutankhamun, were virtually deserted after the doors opened and visitors have been coming back, but at a dribble.

TAHRIR SQUARE

Enterprising Cairo drivers, always eager to entice a fare, now offer a trip to “Cairo’s famous Tahrir Square” for visitors.

“Going down to Tahrir and walking around it could be hard, but everyone wants to know what happened so we explain the revolution of course,” said a cautious Mohsen.

“But I think we won’t stop for people to walk around Tahrir,” Mohsen said of the landmark, where protesters and security forces fought running battles, and from which the tanks have pulled back, but only into nearby side streets.

Egypt, which before the crisis had been receiving about $280 million a week from tourism until tens of thousands fled the revolution after travel warnings by their governments, has had its tourist scares before and has overcome them.

Attackers killed 58 tourists and four Egyptians at an ancient temple near the southern town of Luxor in 1997, six gunmen and three police died. That damaged tourism severely.

From 2004 to 2006, there was a series of deadly bomb attacks at Red Sea resorts in the Sinai. But tourists by that time had become more inured, given militant attacks in U.S. and European cities. Tourist bookings very swiftly recovered.

“Tourism in Egypt may get sick,” said guide and Egyptologist Wagih Thabit, looking after his first visitors since before the uprising at the weekend. “But it will never die.”

(Reporting by Shaimaa Fayed, Writing by Peter Millership)

Cameron’s arrival came hot on the heels of a visit by William J. Burns, U.S. Undersecretary of State for Political Affairs, who started a visit to Egypt in which he will meet with the army-led interim government as well as political groups.

EU foreign policy chief Catherine Ashton is due to arrive in Egypt on Tuesday to discuss the post-Mubarak era in which the army is running the country while setting up free elections to deliver civilian rule and democracy.

Uprisings in Egypt and Tunisia have spread like wildfire in the Arab world, threatening entrenched dynasties from Libya to Bahrain. The West has watched with alarm as long-time allies and foes came under threat, urging reform and restraint.

The Muslim Brotherhood, once banned and playing a growing role in the new Egypt, rejected a government reshuffle on Monday, calling for a purge of the old guard cabinet appointed by Mubarak.

“I think this is a great opportunity to talk to those currently running Egypt to make sure this really is a genuine transition from military rule to civilian rule,” the British prime minister said before arriving in Cairo.

A British official travelling with Cameron said he would meet members of the former opposition to Mubarak but not the Brotherhood, which is Egypt’s most organised political grouping and regarded with suspicion in the West.

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For more stories on the crisis, click on [nLDE71327H]

Protest timeline link.reuters.com/wen97r

For graphics, click on r.reuters.com/nym77r

Interactive factbox link.reuters.com/puk87r

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In a bid to placate pro-democracy activists, the reshuffle late on Sunday named several Mubarak opponents but disappointed those eager for a new line-up as key defence, foreign, justice, interior and finance portfolios were left unchanged.

Egypt’s new military rulers, who took over after an 18-day uprising ended 30 years of Mubarak’s iron rule, have said change in the constitution for elections in six months should be ready soon and hated emergency laws would be lifted before the polls.

But for many democracy advocates, who want a completely new cabinet with no links to Mubarak’s corrupt and autocratic elite to govern the Arab world’s most populous nation, the military needs to put fresh faces in office.

“No one offered us any post and had they done so, we would have refused because we request what the public demands that this government quit as it is part of the former regime,” said Essam El-Erian, a senior member of the Brotherhood.

“We want a new technocratic government that has no connection with the old era,” he told Reuters.

The Brotherhood, which says it wants a democracy wih Islamic principles, is represented on a constitutional change committee, a council to protect the revolution and will register as soon as new rules allow.

“OPEN POLITICAL SPACE”

Uncertainty remains over how much influence Egypt’s military will seek to exert in reshaping a ruling system which it has propped up for six decades, with diplomats saying it is vital to “create an open political space”.

Wary of a clampdown, the Brotherhood took a cautious line early in the protests but has slowly assumed a more prominent role. It still treads warily, saying it will not field a presidential candidate or seek a majority in parliament.

Any sign the army is reneging on its promises of democracy and civilian rule in this key U.S. ally which has a peace treaty with Israel could reignite mass protests on the street.

Friday’s celebrations which marked a week since Mubarak’s overthrow served as a reminder to the military of people power.

The military on Monday announced an amnesty for weapons stolen during the revolution and there were pockets of protests in and around Cairo over pay and conditions despite an order aimed at ending strikes and protests damaging the economy.

In moves to appease democracy advocates, authorities said on Sunday they released 108 political prisoners and Prime Minister Ahmed Shafiq on Monday ordered that streets be renamed to honour some of the 356 “martyrs” who died in the revolt.

But it is increasingly clear that demands for a complete cabinet overhaul top many political activists’ agendas along with lifting emergency rule and freeing political prisoners.

Mubarak, 82, shuffled his cabinet shortly after protests over corruption, poverty and repression erupted on Jan. 25 in an attempt to assuage rage over his autocratic rule and to try and distance himself from his own regime.

Field Marshal Mohamed Hussein Tantawi, who leads the ruling military council that is running Egypt, has been defence minister for 20 years and, according to diplomats, had the job thrust upon him and wants to get back to running the military.

THE NEW FACES

The latest reshuffle brought into the cabinet some new faces including three from registered political parties, a staggering change in Egypt where just four weeks ago opposition groups were harried, fragmented and weakened by decades of oppression.

Yehia el-Gamal, a professor of law and a leader in activist Mohamed ElBaradei’s coalition called the National Association for Change, was appointed deputy prime minister.

Mounir Abdel Nour, secretary-general of the Wafd party, a decades old liberal, nationalist party, became minister in charge of tourism, which has been badly damaged by the unrest with visitors reluctant to visit the pyramids and the Nile.

In other changes, the post of information minister was scrapped after the former minister, Anas el-Fekky, angered protesters with state media playing down or ignoring protests in Tahrir Square and elsewhere for much of the revolution.

Amr Hamzawy, a member of the so-called council of “Wise Men” which sought to mediate a resolution between Mubarak and the protesters during the uprising, became minister for youth.

On the foreign policy front, the new military rulers, in their first diplomatic test, have approved the passage of two Iranian naval vessels through the Suez Canal, causing concern in Israel. Canal officials said on Sunday their passage had been delayed until Wednesday.

(Additional reporting by Edmund Blair, Shaimaa Fayed, Marwa Awad, Tom Perry; Writing by Peter Millership)

In a bid to placate pro-democracy activists, the reshuffle late on Sunday named several Mubarak opponents but disappointed those eager for a new line-up as key defense, foreign, justice, interior and finance portfolios were left unchanged.

Egypt’s new military rulers, who took over after an 18-day uprising ended 30 years of Mubarak’s iron rule, has said changes in the constitution for elections in six months should be ready soon and hated emergency laws would be lifted before the polls.

But for many democracy advocates, who want a completely new cabinet with no links to Mubarak’s corrupt and autocratic elite to govern the Arab world’s most populous nation, the military needs to put fresh faces in office.

“No one offered us any post and had they done so, we would have refused because we request what the public demands that this government quit as it is part of the former regime,” said Essam El-Erian, a senior member of the Brotherhood, which is Egypt’s most organized political group.

“We want a new technocratic government that has no connection with the old era,” he told Reuters.

The Brotherhood, viewed with suspicion by Washington and which wants a democracy with Islamic principles, is represented on a constitutional change committee, a council to protect the revolution and will register as soon as new rules allow.

Uprisings in Egypt and Tunisia have spread like wildfire in the Arab world, threatening entrenched dynasties from Libya to Bahrain. The West has watched with alarm as long-time allies and foes came under threat, urging reform and restraint.

“OPEN POLITICAL SPACE”

Uncertainty remains over how much influence Egypt’s military will seek to exert in reshaping a corrupt and oppressive ruling system which it has propped up for six decades, with diplomats saying it is vital to “create an open political space.”

Wary of a clampdown, the Brotherhood took a cautious line early in the protests but has slowly assumed a more prominent role. It still treads warily, saying it will not field a presidential candidate or seek a majority in parliament.

Any sign the army is reneging on its promises of democracy and civilian rule in this key U.S. ally which has a peace treaty with Israel could reignite mass protests on the street.

Friday’s celebrations which marked a week since Mubarak’s overthrow served as a reminder to the military of people power.

The military on Monday announced an amnesty for weapons stolen during the revolution and there were pockets of protests in and around Cairo over pay and conditions despite an order aimed at ending strikes and protests damaging the economy.

In moves to appease democracy advocates, authorities said on Sunday they released 108 political prisoners and Prime Minister Ahmed Shafiq on Monday ordered that streets be renamed to honor some of the 356 “martyrs” who died in the revolt.

But it is increasingly clear that demands for a complete cabinet overhaul top many political activists’ agendas along with lifting emergency rule and freeing political prisoners.

Mubarak, 82, shuffled his cabinet shortly after protests over corruption, poverty and repression erupted on January 25 in an attempt to assuage rage over his autocratic rule and to try and distance himself from his own regime.

Field Marshal Mohamed Hussein Tantawi, who leads the ruling military council that is running Egypt, has been defense minister for 20 years and, according to diplomats, had the job thrust upon him and wants to get back to running the military.

THE NEW FACES

The latest reshuffle brought into the cabinet some new faces including three from registered political parties, a staggering change in Egypt where just four weeks ago opposition groups were harried, fragmented and weakened by decades of oppression.

Yehia el-Gamal, a professor of law and a leader in activist Mohamed ElBaradei’s coalition called the National Association for Change, was appointed deputy prime minister.

Mounir Abdel Nour, secretary-general of the Wafd party, a decades old liberal, nationalist party, became minister in charge of tourism, which has been badly damaged by the unrest with visitors reluctant to visit the pyramids and the Nile.

In other changes, the post of information minister was scrapped after the former minister, Anas el-Fekky, angered protesters with state media playing down or ignoring protests in Tahrir Square and elsewhere for much of the revolution.

Amr Hamzawy, a member of the so-called council of “Wise Men” which sought to mediate a resolution between Mubarak and the protesters during the uprising, became minister for youth.

On the foreign policy front, the new military rulers, in their first diplomatic test, have approved the passage of two Iranian naval vessels through the Suez Canal, causing concern in Israel. Canal officials said on Sunday their passage had been delayed until Wednesday.

(Additional reporting by Edmund Blair, Shaimaa Fayed, Marwa Awad, Tom Perry; Writing by Peter Millership)

Facing a wave of protests by workers ranging from banking staff to tourist guides, the military rulers urged people to return to their jobs to avoid more damage to an economy hurt by the 18-day uprising.

A powerful dust storm affecting Cairo was expected to deter worker demonstrations on Tuesday, which is also a national holiday to mark the Prophet Mohammad’s birthday, so the response to the appeal was more likely to become clear on Wednesday.

The military was holding talks with activists at the forefront of the revolt that ended Mubarak’s 30-year rule to reassure them of their commitment to democracy and a smooth and orderly transition of power.

But with anger still smoldering over rising prices, low wages and economic hardship, the military faces a delicate balancing act in restoring stability while allaying suspicions about its readiness to relinquish power.

Egypt’s revolution sent shock waves around the Middle East as well as global financial markets worried about the effect on oil supplies.

Police in Bahrain, neighbor of the world’s biggest oil exporter Saudi Arabia, clashed with funeral-goers mourning a Shi’ite protester shot dead on Monday during an anti-government “Day of Rage”, and one person was killed in the melee.

Thousands of Iranian opposition activists rallied in support of the uprisings in Egypt and Tunisia on Monday and a semi-official news agency said one person was shot dead and several wounded by protesters.

Using their newfound freedom of expression and protest, workers on Monday rallied in Cairo and other cities to complain about low pay and poor working conditions.

Protests, sit-ins and strikes have occurred at state-owned institutions across Egypt, including the stock exchange, textile and steel firms, media groups, the postal services and railways, since Mubarak resigned.

“VICTORY MARCH”

Pro-democracy leaders say Egyptians will demonstrate again if their demands for radical change are not met. They plan a big “Victory March” on Friday to celebrate the revolution — and perhaps to remind the military of the power of the street.

In Tahrir Square, the scene of bloody clashes between activists and police during the revolution, traffic flowed freely on Tuesday directed by military policemen as a couple of burned-out vehicles were taken away as part of the cleanup.

There were scuffles on Monday as the last protesters were removed by the military along with the remnants of their camp. Tanks and armored vehicles around the square and other Cairo locations were now stationary and sandbagged in.

In “Communique No. 5″ read out on state television on Monday, a military spokesman said: “Noble Egyptians see that these strikes, at this delicate time, lead to negative results.”

The military has promised free and fair elections, suspended the constitution and dissolved parliament, dismantling the apparatus that has kept Mubarak in power since he took over from Anwar Sadat, who was assassinated by Islamist soldiers in 1981.

Wael Ghonim, a Google executive who had been detained for his part in the uprising, said members of the military council had told him a plebiscite would be held on constitutional amendments in two months, a prelude to holding elections.

The high command on Monday appointed retired judge Tareq al-Bishry, respected in legal circles for his independent views, to head a committee set up to propose constitutional changes.

But the military has given no timetable for elections beyond saying it would be in charge “for a temporary period of six months or until the end of elections to the upper and lower houses of parliament, and presidential elections”.

Some have expressed concern about the open-ended nature of the timetable.

MUSLIM BROTHERHOOD

Existing political groupings are mostly small, weak and fragmented. The Muslim Brotherhood, which under the now-suspended constitution could not form a party, may be the best organized group but its true popularity has yet to be tested.

“When the popular demand for the freedom to form parties is realized, the group will found a political party,” said the Brotherhood in a new statement posted on the group’s website.

The Brotherhood is an Islamist group founded in the 1920s with deep roots in Egypt’s conservative Muslim society. Washington has expressed concern about its “anti-American rhetoric”, saying “we have serious disagreements”.

Others need at least a year to prepare for an election, said one politician who struggled to found a party under Mubarak.

“If parliamentary elections happen now, the only party ready to go into elections are the Muslim Brotherhood,” said Abou Elela Mady, who broke away from the Brotherhood in the 1990s.

In a move to placate pro-democracy activists, Egypt’s army said it would lift the country’s hated state of emergency, in place for as long as Mubarak was in power. It has yet to say when this will happen, troubling campaigners.

U.S. Secretary of State Hillary Clinton said on Monday it was up to Egypt to decide when to lift the state of emergency.

In an interview with Al Jazeera she noted that Washington had long called for the law’s removal, but said, “It’s not for me to counsel them. This is an Egyptian process that must be directed and defined by the Egyptian people.”

Mubarak, 82, has not been seen since final television addresses made last-ditch attempts to try and turn the tide of popular resentment that eventually engulfed him. He is thought to be at his villa in the Red Sea resort of Sharm el-Sheikh.

The United States, Britain and France said on Monday they had been asked by Egypt to freeze the assets of former Egyptian officials, although Washington and Paris said Mubarak was not on the list.

(Reporting by Marwa Awad, Edmund Blair, Alexander Dziadosz, Shaimaa Fayed, Andrew Hammond, Alistair Lyon, Sherine El Madany, Tom Perry, Yasmine Saleh, Patrick Werr, Jonathan Wright and Dina Zayed; writing by Peter Millership, Editing by Sonya Hepinstall)

The nation wakes up to its first working day on Sunday since Mubarak was toppled during the Egyptian weekend, and protest organizers have threatened more rallies if the military fails to meet their demands.

The military has given no timetable for the transition but says it is committed to civilian rule and democracy. A cabinet meeting, due later on Sunday, could provide some answers.

As Egypt celebrated the dawn of a new post-Mubarak era, the streets of central Cairo were still filled with euphoric crowds dancing to loud music and waving flags into the early hours of Sunday, more than 24 hours after Mubarak resigned.

On Sunday, shops will reopen and many will head back to work, with life expected to begin to return to normal after 18 days of protests that changed the course of Egypt’s history.

Mubarak’s toppling marked the beginning of a new, uncertain era in the Middle East where autocratic leaders fear Egypt’s revolt could spill over into other parts of the oil-rich region.

Restoring order is a top priority. Tanks and troops have been guarding strategic buildings so far as police disappeared from the streets. Repairing police stations burned down during the protests is another urgent task.

Hundreds camped out in Tahrir Square in central Cairo overnight to keep up the pressure on the military leadership, saying they would stay there until the ruling Higher Military Council accepts their agenda for reform.

“If the army does not fulfill our demands, our uprising and its measures will return stronger,” said Safwat Hegazi, a protest leader. Organizers want the dissolution of parliament and the lifting of a 30-year-old state of emergency.

Some protest organizers were forming a Council of Trustees to defend the revolution and negotiate with the military.

CARNIVAL ATMOSPHERE

The carnival atmosphere in Cairo contrasted sharply with the tense and menacing atmosphere prior to Mubarak’s downfall when soldiers with tanks manned checkpoints and vigilantes with baseball bats guarded neighborhoods.

Brightly lit pleasure cruisers plied their trade on the Nile while horse-drawn carriages were back on the streets for intrepid sight-seers. Some people took photographs alongside smiling soldiers, and showed victory signs to each other.

Fashion and music shops reopened on Saturday night for the first time since the start of the crisis, and loud music reverberated through central Cairo all night.

Military leaders promised to honor Egypt’s treaties, a message clearly aimed at easing concerns in Israel, which has a 1979 peace accord with Egypt, and in the United States, which considers that treaty the cornerstone of Middle East security.

U.S. President Barack Obama welcomed the announcement from military leaders that they were committed to a democratic civilian transition and would stand by Egypt’s international obligations. Obama called the leaders of Britain, Jordan and Turkey on Saturday to discuss Egypt.

The new administration, keen to dissociate itself from Mubarak’s old guard, said it was investigating accusations against the former prime minister, interior minister and information minister, state television reported.

Mubarak, 82, was believed to be at his residence in the Red Sea resort of Sharm el-Sheikh, his future unclear.

The events in Egypt sent shockwaves abroad. In Yemen, an anti-government protest was broken up on Saturday and in Algiers thousands of police stopped protesters from staging a march.

(Reporting by Samia Nakhoul, Edmund Blair, Marwa Awad, Yasmine Saleh, Dina Zayed, Shaimaa Fayed, Alexander Dziadosz, Sherine El Madany, Patrick Werr, Alistair Lyon, Tom Perry, Andrew Hammond, Jonathan Wright, Peter Millership and Alison Williams in Cairo and Christian Lowe in Algiers; Writing by Maria Golovnina)

Pro-democracy activists in Cairo’s Tahrir (Liberation) Square, the epicenter of an earthquake of popular protest that unseated Mubarak, have vowed to stay there until the Higher Military Council accepts their agenda for democratic reform.

Throughout the Middle East, autocratic rulers were calculating their chances of survival after Mubarak was forced from power in a dramatic 18-day uprising that changed the course of Egypt’s history, unsettling the United States and its allies.

“The Arab Republic of Egypt is committed to all regional and international obligations and treaties,” a senior army officer said in a statement on state television, outlining the armed forces’ broad strategies at home and abroad.

The message was clearly designed to try and soothe concerns in Israel which has a 1979 peace treaty with Egypt, the first Arab nation to make peace with the Jewish state. Israeli Finance Minister Yuval Steinitz welcomed the statement.

In another move to restore order, the army said it would “guarantee the peaceful transition of power in the framework of a free, democratic system which allows an elected, civilian power to govern the country to build a democratic, free state”.

Commenting after the army statement, Egypt’s Islamist Muslim Brotherhood, viewed with suspicion by the United States, said that it was not seeking power and praised the efforts of the new army rulers to transfer power to civilians.

Crowds celebrated in Tahrir Square while protest organizers urged the army to meet demands including the dissolution of parliament and the lifting of a 30-year-old state of emergency used by Mubarak to crush opposition and dissent.

APPETITE FOR TRANSITION

“The army is with us but it must realize our demands. Half-revolutions kill nations,” pharmacist Ghada Elmasalmy, 43, told Reuters.

It remains to be seen what appetite the military has for a quick transition to genuine parliamentary democracy. The military council gave few details of a “transitional phase” and gave no timetable for presidential or parliamentary elections.

The tumultuous events in Egypt sent shock waves abroad.

In Sanaa, a demonstration by some 2,000 people inspired by the Egyptian revolt broke up after clashes with pro-government demonstrators armed with knives and batons. In Algiers thousands of police stopped government opponents from staging a march.

Mubarak, 82, was believed to be at his residence in the Red Sea resort of Sharm el-Sheikh, his future unclear.

Al Arabiya has said the army will soon dismiss the cabinet and suspend parliament. The head of the Constitutional Court would join the leadership with the military council, which was given the job of running the country of 80 million people.

The best deterrent to any military attempt to stay in control could be the street power and energy of protesters who swept out Mubarak because he governed without their consent.

One priority was restoring law and order before the working week starts on Sunday. Tanks and soldiers have guarded key buildings and intersections since the disgraced police force largely melted away after failing to crush protesters.

Cairo residents photographed each other holding flowers with smiling soldiers on the first day of the post-Mubarak era.

A carnival air lingered in the capital’s Tahrir Square, where the army dismantled checkpoints and some makeshift barricades were removed. Volunteers proudly swept the square.

CAMEL CHARGE

Eighteen days of rallies, resisting police assaults, rubber bullets, live rounds and a last-ditch charge by pro-Mubarak hardliners on horses and camels, had brought improbable success.

“This is the start of the revolution, it’s not over yet, but I have to go back to work,” said Mohammed Saeed, 30, packing away his tent.

Mohammed Farrag, 31, who was also departing, said he believed stability was returning. “But we will not give up on Egypt as a civilian state, not a military state,” he said.

Many wanted to see the immediate end to emergency laws.

“People’s Communique No. 1″, issued by protest organizers, demanded the dissolution of the cabinet Mubarak named on January 29 and of the parliament elected in a rigged vote late last year.

Some organizers were forming a Council of Trustees to defend the revolution and negotiate with the military council. “The council will have authority to call for protests or call them off depending on how the situation develops,” one said.

The Council of Trustees plans to call for a mass turnout next Friday to celebrate the success of the revolution.

The reformists want a transitional five-member presidential council made up of four civilians and one military officer.

The communique called for the formation of a transitional government to prepare for an election to take place within nine months, and of a body to draft a new democratic constitution.

Egypt’s opposition had been throttled by emergency rule imposed after Mubarak succeeded Anwar Sadat, shot dead by an Islamist army officer in 1981, and there has been no obvious Nelson Mandela or Lech Walesa to spearhead Egypt’s revolution.

OPPOSITION WEAKENED

Egypt’s registered opposition parties have been weakened, fractured or compromised under Mubarak. Protest groups that have sprung up in recent years have proved far more nimble, effective and adept at using social media as Mubarak’s grip weakened.

One possible leader is Amr Moussa, a former foreign minister who has said he will resign from his post as Arab League chief.

Other potential contenders are retired diplomat Mohamed ElBaradei and scientist Ahmed Zewail, both Nobel Prize winners.

The best-organized group is the Muslim Brotherhood, but its true level of support, and internal cohesion, is not known.

“We support and value the sound direction that the Higher Military Council is taking on the way to transfer power peacefully to create a civilian government,” said the Brotherhood, saying it would not seek power.

It was unclear if any of the little-known youth leaders behind the well-organized revolt wanted to hold office.

Mubarak’s political end was swift, taking place less than a day after he stunned protesters by insisting he would not step down despite widespread expectations that he was about to do so.

In the United States, President Barack Obama said “nothing less than genuine democracy” would satisfy Egyptians. “This is not the end of Egypt’s transition. It’s a beginning. I’m sure there will be difficult days ahead,” he said.

Washington has pursued a sometimes shifting line since the anti-Mubarak protests began on January 25, wary of losing a bulwark against militant Islam but keen to back political freedom.

Saudi Arabia, which had supported Mubarak throughout, said on Saturday it welcomed the peaceful transition of power.

In China’s first reaction, an official paper called for stability said foreigners should refrain from intervening.

(Reporting by Samia Nakhoul, Edmund Blair, Marwa Awad, Yasmine Saleh, Dina Zayed, Shaimaa Fayed, Alexander Dziadosz, Sherine El Madany, Patrick Werr, Alistair Lyon, Tom Perry, Andrew Hammond, Jonathan Wright, Peter Millership and Alison Williams in Cairo and Christian Lowe in Algiers; Writing by Peter Millership; editing by Alistair Lyon and Jon Hemming)

Christopher Meyer, ambassador to the United States between 1997 and 2003, said private one-to-one talks between Bush and the then British Prime Minister seemed to mark an important point on the route to the March 2003 U.S.-led invasion of Iraq.

“I know what the Cabinet Office says were the results of the meeting but to this day I am not entirely clear what degree of convergence was, if you like, signed in blood at the Crawford ranch,” Meyer told a British inquiry into the Iraq war.

Meyer said comments that Blair made after the Texas meeting seemed to signal that his views on whether to overthrow Iraqi dictator Saddam Hussein had moved toward Bush’s stand.

“There are clues in the speech that Tony Blair gave the next day … To the best of my knowledge, I may be wrong, this was the first time that Tony Blair had said in public ‘regime change’,” Meyer said.

“What he was trying to do was to draw the lessons of 9/11 and apply them to the situation in Iraq which led — I think not inadvertently but deliberately — to a conflation of the threat posed by Osama bin Laden and Saddam Hussein.”

Speaking to the inquiry in London on its third day, Meyer said: “When I heard that speech, I thought that this represents a tightening of the UK/U.S. alliance and a degree of convergence on the danger that Saddam Hussein presented.”

Some U.S. officials had argued that there were possible links between Saddam and al Qaeda, which was blamed for masterminding the 2001 attacks on the United States. However, these suggestions have since been discredited.

A five-member inquiry team, headed by former civil servant John Chilcot is examining the reasons for British participation in the 2003 invasion and the subsequent occupation of Iraq, promising a thorough and rigorous probe of events.

Of the Crawford talks when the two leaders spent much of the time alone without advisers, Meyer said: “They weren’t there to talk about containment or sharpening sanctions. There had been a sea change in attitudes in the U.S. administration to which the British government … from October onwards had to adapt and make up its mind where it stood.”

Meyer said that on September 11, 2001, he spoke to Condoleezza Rice, then Bush’s national security adviser, who said there was no doubt the attack on America was an al Qaeda operation and agencies were looking into possible connections with Iraq.

Meyer noted the Iraq Liberation Act of 1998 signed by President Bill Clinton declared U.S. policy as one of supporting efforts to remove the regime headed by Saddam Hussein.

“Regime change was the formal policy of the United States of America. It didn’t necessarily mean an armed invasion at that time of Iraq,” said Meyer.

The former ambassador said that the “unforgiving nature” of the military timetable for an invasion of Iraq in 2003 did not give time for U.N. weapons inspectors led by Hans Blix to do their job in Iraq.

“It was impossible to see how Blix could bring the inspection process to a conclusion, for better or worse, by March,” Meyer said.

“… you had to short-circuit the inspection process by finding the notorious smoking gun … We found ourselves scrabbling for the smoking gun, which was another way of saying ‘it’s not that Saddam has to prove that he’s innocent, we’ve now bloody well got to try and prove that he’s guilty.’”

“And we — the Americans, the British — have never really recovered from that because of course there was no smoking gun.”

(Editing by David Stamp)