Egypt army calls for unity talks ahead of referendum

Egypt's powerful army has called for President Mohamed Morsi and the secular opposition to meet on Wednesday to stop a crisis over an imminent constitutional referendum from tearing the country apart.

The televised appeal by General Abdel Fattah al-Sissi, the country's armed forces chief and defence minister, came late Tuesday, as rival camps of Morsi supporters and opponents brought tens of thousands of people out for separate mass rallies in Cairo.

The military has said it fears the Arab world's most populous country is headed for a disastrous "dark tunnel" unless the two sides talk. It has warned it will not allow the situation to worsen.

Troops have orders to use police powers to protect state institutions until results are announced from the referendum, which is scheduled for Saturday.

The United States has urged Egypt's military -- which it provides with billions of dollars each year -- "to exercise restraint, to respect the right of peaceful protest."

Egypt's main opposition group, the National Salvation Front, has so far rejected talks with Morsi and his Islamist camp unless the referendum is scrapped. But it said it was weighing the army's appeal.

Morsi has previously declared himself ready to start dialogue with the Front but has said postponing the referendum is impossible.

Overnight, Islamists and the opposition brought out huge crowds for and against the plebiscite.

There was no immediate sign of any violence like that of last week, when clashes killed seven people and hurt hundreds outside Morsi's presidential palace.

This time, thousands of anti-Morsi protesters tore down parts of a concrete and metal barricade that had been set up by soldiers near the palace.

They unfurled a banner calling for the fall of Morsi's Muslim Brotherhood and cried "Revolution!" but made no move to storm the presidential compound.

"I'm not scared of the army. I think their offer for dialogue is positive," said one protester, Aiman Khaled, 26.

A much bigger Islamist counter-demonstration a few kilometres (miles) away gathered tens of thousands of referendum supporters whose mood was equally determined.

"It's the last battle for Islam against the secularists who want to ruin Egypt," said demonstrator Ahmed Alaa, who was bussed in from the north of the country.

In his speech on state television, Sissi said the proposed meeting for Wednesday, in a military sports complex in northeast Cairo, aimed to bring all political actors, including Morsi and the opposition, together along with youth movements, judges and journalists.

It would not, he said, be a forum for structured political negotiations but rather an attempt to come up with some sort of entente "for the sake of Egypt".

"We will not talk politics or the referendum. We will just sit together so that every Egyptian who is worried in their home is reassured," the armed forces chief said. "You can have differences, but not quarrel."

The opposition, made up of secular, leftwing and liberal groups, sees the draft constitution rushed through by an Islamist-dominated panel last month as weakening human rights, the rights of women and religious minorities.

Morsi's supporters argue that it is up to Egypt's voters to decide.

Michael Wahid Hanna, a political analyst at US think-tank The Century Foundation, told AFP that, as things stood, there was a good chance of the referendum passing.

If that happened, Hanna warned, "I fear they are going to have an institutionalised crisis" that would polarise Egypt in the long term, with possible violent consequences.

Washington said there were "real and legitimate questions" about the referendum process.

State Department spokeswoman Victoria Nuland said there were fears for "public order surrounding the polling", but urged Egypt's military to show restraint.

The prolonged crisis, the worst since a popular uprising overthrew autocratic president Hosni Mubarak early last year, is intensifying uncertainty over Egypt's economy.

The International Monetary Fund on Tuesday put on hold a $4.8-billion loan Egypt has sought to fill budget gaps it will face in the 2013-2014 fiscal year. The IMF had been expected to review the loan, which would have come with budget-cutting requirements attached, this month for final approval.

Egyptian Prime Minister Hisham Qandil said: "We have officially requested the delay of a month in the negotiations with the IMF because of the political situation in the country."

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