Egypt Army Deploys Tanks outside Presidential Palace

Egyptian troops deployed tanks outside the presidential palace on Thursday as the nation awaited President Mohamed Morsi's first address since streets clashes between his supporters and opponents rocked the capital.

The military set up a barbed wire barrier 150 meters (yards) from the palace, after ordering Morsi allies and foes alike to pull back, an AFP correspondent reporter.

Confusion reigned as to whether Morsi would give a televised address to the nation, with a senior aide saying he would, but an official in his office later telling AFP he would "most likely" not give the speech on Thursday.

In Morsi's hometown, the Nile Delta city of Zagazig, police used tear gas to disperse protesters who surrounded the home of one of the president's relatives, a police official said.

On Wednesday night, seven people were killed and 644 injured in clashes between Islamists and opposition activists, medical sources said. Another 50 people were arrested.

The anti-Morsi camp is furious with the president for his assuming sweeping powers two weeks ago and by what it feels was the railroading through by an Islamist-dominated panel of a draft constitution.

Many demonstrators were injured by birdshot, the health ministry said, but it was not immediately clear who was firing.

"(Hosni) Mubarak was tried for not protecting protesters. What about Morsi?" said student Korlos Magdy, 21, referring to the veteran strongman who was sentenced to life in prison for his role in the deaths of hundreds of protesters in the uprising that toppled him early last year.

At least 10 Republican Guard tanks deployed around the presidential palace in the upmarket Cairo neighborhood of Heliopolis as the army gave demonstrators a 3:00 pm (1300 GMT) deadline to disperse, an AFP correspondent reported.

Morsi supporters who had camped out near the palace began packing their belongings ahead of the deadline, the correspondent reported.

Morsi opponents regrouped in a square about 300 meters (yards) away.

Republican Guard chief General Mohammed Zaki said the tanks were deployed to separate the feuding sides, pledging that the military "will not be an instrument of oppression."

Morsi, who often spends the night at his private home in another Cairo suburb, arrived at the palace early on Thursday.

Egypt's top Islamic body, al-Azhar, told him he should "suspend the latest decree and stop using it," while also demanding an unconditional dialogue between the president and his opponents.

Four of Morsi's advisers have quit over the crisis, official news agency MENA reported, and the head of state television has also resigned, the independent newspaper al-Masry al-Youm reported on its website.

The Cairo stock market took a heavy hit from the latest violence, with the EGX-30 index plunging 4.6 percent at the close.

Wednesday's violence erupted when the Muslim Brotherhood, which fielded Morsi for the presidency, marched to the palace where opposition protesters were holding a sit-in.

Pro- and anti-Morsi activists armed with sticks, guns, fire bombs and rocks clashed with each other through the night.

"It's the beginning of a religious state," said Sahar Ali, a 39-year-old tour guide and Morsi opponent. "They're trying to turn it into Iran, but we won't let this happen. We got rid of the military -- the Brotherhood is next."

The opposition says it will not stand down until Morsi surrenders his new powers -- which put his decisions beyond judicial review -- and until he cancels a snap December 15 referendum on the new constitution opposed by liberals and Christians.

The Brotherhood urged protesters on both sides to stand down, as did Prime Minister Hisham Qandil.

The United States called for an open and "democratic dialogue" in Egypt.

"The upheaval we are seeing... indicates that dialogue is urgently needed. It needs to be two-way," U.S. Secretary of State Hillary Clinton said in comments echoed by Britain and the European Union.

Despite the protests, Vice President Mahmoud Mekki said a referendum on the charter "will go ahead on time" on December 15.

He said the opposition would be allowed to object in writing to articles in the draft constitution that would be discussed by a parliament yet to be elected.

Prominent opposition leader and former U.N. nuclear watchdog chief Mohamed al-Baradei said Morsi bore "full responsibility" for the violence.

He said the opposition was ready for dialogue but would use "any means necessary" to scupper the charter, stressing, however, that they would be peaceful.