Egypt Islamists claim presidency as army tightens grip

CAIRO (Reuters) - Egypt's Muslim Brotherhood said on Monday its candidate won the country's first free presidential election, but a sweeping legal maneuver overnight by Cairo's military rulers made clear the generals planned to keep control for now.

An election committee source told Reuters that Islamist Mohamed Morsy, a U.S.-educated engineer, was comfortably ahead of former air force general Ahmed Shafik with most of the votes tallied. But the count, which would make him the first civilian leader in 60 years, had yet to be officially finalized.

In any event, however, the new president will be subordinate for some time at least to the military council which last year pushed fellow officer Mubarak aside to appease street protests.

In the latest twist on Egypt's tortuous path from revolution to democracy, the Supreme Council of the Armed Forces (SCAF) issued a decree as two days of voting ended on Sunday which set strict limits on the powers of head of state. On the eve of the election, it had already dissolved the Islamist-led parliament.

Liberal and Islamist opponents denounced a "military coup".

"Military Transfers Power, to Military," ran the ironic headline in independent newspaper al-Masry al-Youm.

The Brotherhood, however, expressed its joy and defiance on the streets and may challenge moves by the generals that cast doubt on their pledge to hand over to civilian rule by July 1 - a promise supported by Egypt's U.S. and European allies, despite their deep misgivings about the rise of political Islam in the wake of the Arab Spring uprisings across the Middle East.

"Thanks be to God who has guided Egypt's people to the path of freedom and democracy, uniting Egyptians for a better future," Morsy, a former political prisoner, said in a victory speech in which he forswore seeking revenge or settling scores.

An aide to Shafik, Mubarak's last prime minister, refused to concede defeat and accused Morsy of "hijacking the election."

However, the source on the electoral committee told Reuters: "The results ... which show Morsy in the lead, reflect to a large degree the results tallied by the electoral committee."

The Brotherhood put Morsy ahead by 52 percent to 48 on a turnout of about 50 percent. Many supporters of candidates knocked out in last month's first round stayed home or spoiled their ballots in protest at a choice they saw as between going back to the old regime or a future religious state.

ISLAMIC FUTURE

Hundreds of flag-waving supporters of the Brotherhood, whose members long suffered imprisonment, torture and death at the hands of the generals, gathered in Tahrir Square, where the anti-Mubarak revolution erupted in central Cairo 16 months ago.

"Thank God, we have got rid of military rule and the police state," said Mona Issam, one of a group of cheering women clad in long robes and full-face veils. "We hope Morsy takes power from the military council and the army goes back to barracks.

"God has given us victory. God stood by us and lifted the weight of oppression. We wanted an Islamic state. We lived like strangers in our land under the old regime. We were oppressed and Islam was not the law. I'm very, very happy. Thank God."

Hosni Qutb, a 45-year-old physician, derided Shafik as the "candidate of Israel", in reference to the military rulers' 33-year-old peace treaty with Egypt's Jewish neighbor. Israel fears growing hostility from Cairo and said an Israeli and two militants were killed in an attack on its border overnight.

"We got rid of the despot," said Mohammed al-Sayyed, 46. "Now we will live in freedom. There will be no arrests or prisons. The revolution has succeeded and we have got our country back."

However, the crowds hardly attracted notice in the morning rush hour and measured barely a drop compared the human sea that engulfed central Cairo on February 11 last year when Mubarak fell.

The 60-year-old Islamist candidate had attracted support from some who reject the Brotherhood's religious agenda and the imposition of Islamic law but were determined to bar the way to Shafik, 70, whom they see as the heir to the old regime.

But as Islamists celebrated, unemployed Mohamed Mahmoud, 28, did not share their joy: "I voted for Morsy but I can't say I'm happy," he said. "I'm still afraid of both and what they may do.

"I don't want an Islamic state or a new Mubarak state."

Political chaos has ravaged a vital tourist trade focused on pyramids and Red Sea beaches and the latest turn of events, by prolonging uncertainty, may further harm the economy:

"There is a bit more uncertainty now," said stock trader Teymour el-Derini at Naeem Brokerage. "We have a new president but it means nothing because he has nothing to do. I don't think we will have a huge sell-off, but there will be some sellers."

"SETBACK FOR DEMOCRACY"

The military council's "constitutional declaration", issued under powers it took for itself last year, was a blow to democracy, said many who aired their grievances on social media.

"Grave setback for democracy and revolution," tweeted former U.N. diplomat and Nobel peace laureate Mohamed ElBaradei.

"SCAF retains legislative power, strips president of any authority over army and solidifies its control," he said.

"The 'unconstitutional declaration' continues an outright military coup," tweeted Abdel Moneim Abol Fotouh, a moderate Islamist knocked out in the first round of voting.

"We have a duty to confront it."

The order from Field Marshal Hussein Tantawi, the chairman to the Supreme Council, indicated that the army, which also controls swathes of Egypt's economy, has no intention of handing substantial power now to its old adversary the Brotherhood.

The Brotherhood has contested the army's power to dissolve parliament and warned of "dangerous days" ahead. But few expect the Islamists, who were not in the vanguard of the revolt and spent much of the past year in uneasy symbiosis with the army, to launch a violent grab for power any time soon.

"This is the beginning of a very tough path," a senior Brotherhood official, Essam el-Haddad told Reuters, "The beginning of it is dealing with the amended constitutional declaration that strips the president of any real powers."

The failure of the new parliament to agree a consensus body to draft a constitution - liberals accuse the Islamists of packing the panel with religious zealots - has left Egyptians picking their way from revolution to democracy through a legal maze while the generals control the map and change it at will.

Under the latest order, writing of the new constitution may pass to a body appointed by the SCAF - if a court rules against the contested panel nominated by the now defunct legislature.

Any new constitution would need approval in a referendum, with a new parliamentary election following. By a timetable contained in the decree, it would take another five months or so to complete the planned "transition to democracy".

However, the experience of the past year has left many Egyptians doubting that the military, and what they call the "deep state" stretching across big business, Mubarak-era judges, security officials and the army, will ever hand over control.

"SCAF isn't going to transfer any real power," Marc Lynch, a Middle East expert at George Washington University said on Twitter of the constitutional order. "Back to the beginning."

(Additional reporting by Dina Zayed, Tom Pfeiffer, Edmund Blair, Alastair Macdonald and Samia Nakhoul in Cairo; Writing by Edmund Blair and Alastair Macdonald; Editing by Samia Nakhoul and Janet McBride)

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