Israel warned on Saturday that it would cut the supply of water and electricity to the Gaza Strip if rival Palestinian movements Fatah and Hamas form a unity government.

"The foreign ministry is examining the possibility of Israel pulling out of the Gaza Strip in terms of infrastructure," Deputy Foreign Minister Danny Ayalon told the daily Yediot Aharonot website.

Egypt's military ruler on Saturday held talks with presidential hopefuls Mohammed el-Baradei and Amr Moussa whose names have been touted by protesters as possible leaders of a new government.

Field Marshal Hussein Tantawi met separately el-Baradei, the former head of the U.N. nuclear watchdog, and Moussa, the ex-head of the Arab League, the official MENA agency said, as protesters demanding the end of military rule remained camped out in Cairo's Tahrir Square.

One person died in fresh clashes on Saturday, as the rift between Egypt's military rulers and activists who ousted Hosni Mubarak deepened just days before landmark polls.

The naming of a new prime minister, Kamal al-Ganzuri who once served as premier under Mubarak, failed to satisfy demands for change ahead of parliamentary elections due to start on Monday.

Tens of thousands of demonstrators packed Cairo's Tahrir Square on Friday after days of deadly clashes, demanding the military rulers step down and rejecting their choice of new prime minister.

Ahead of elections due to start on Monday despite the political turmoil, Egypt's Supreme Council of the Armed Forces (SCAF) tasked Kamal al-Ganzouri, 78, a premier under ousted president Hosni Mubarak, to head a new cabinet.

Protesters blocked the entrance to Egypt's cabinet headquarters on Friday in a bid to prevent newly-named Prime Minister Kamal al-Ganzuri from entering the building, an AFP reporter said.

The action was in protest at Ganzuri's appointment, one of the organizers, Ahmed Zahran, told AFP, adding that a news conference would follow shortly.

Egyptian state television says the nation's ruling military has asked a Mubarak-era prime minister to head the next government.

Kamal el-Ganzouri, 78, served as prime minister in the 1990s under President Hosni Mubarak, toppled in a popular uprising in February. The Friday television announcement followed a meeting between el-Ganzouri and military ruler Field Marshal Hussein Tantawi the night before.

The imam leading tens of thousands of worshippers in prayer at Cairo's Tahrir Square on Friday called on the ruling military to hand power to a national salvation government.

Sheikh Mazhar Shahin said protesters would remain in the square -- the symbolic heart of rallies that toppled President Hosni Mubarak -- until their demands were met.

Thousands of supporters of Egypt's ruling military council turned up for a rally in Cairo's Abassiya neighborhood on Friday, just miles from a mass protest in Tahrir Square calling for the end of military rule.

"The military, the police and the people are one," the protesters chanted according to the MENA news agency.

The transfer of power to a civilian government in Egypt must be "just and inclusive" and take place "as soon as possible," the White House said Friday.

"Most importantly, we believe that the full transfer of power to a civilian government must take place in a just and inclusive manner that responds to the legitimate aspirations of the Egyptian people, as soon as possible," White House Press Secretary Jay Carney said in a statement.

Egypt's ruling military council on Thursday tasked former prime minister Kamal al-Ganzouri with forming a new cabinet, private Egyptian TV channels reported.

Ganzouri headed the government from 1996 to 1999, under ousted president Hosni Mubarak.