Army hopes to hand Egypt to civilian rule by August

By Andrew Hammond and Peter Millership
CAIRO (Reuters) – Egypt's new military rulers said on Tuesday they hoped to hand power over to an elected civilian leadership within six months and that they had no desire to keep control following the overthrow of President Hosni Mubarak.
The remarks carried on the state agency were the clearest indication since Mubarak was forced to resign on Friday that the high command was committed to a brief timeframe for meeting the demands of pro-democracy protesters for a new start.
Some secular leaders have raised concerns, however, that racing into presidential and parliamentary elections in a nation where Mubarak had suppressed most opposition activity for 30 years may hand an advantage to the Muslim Brotherhood, probably Egypt's best organized political force.
"The Higher Military Council expressed its hope to hand over power within six months to a civilian authority and a president elected in a peaceful and free manner that expresses the views of the people," an armed forces statement said.
"The council affirmed that it does not seek power, that the current situation was imposed on the armed forces and that they have the confidence of the people," it said.
The military also decreed that a committee headed by an independent judge, Tareq al-Bishry, should finish its work within 10 days on drafting amendments to the constitution. The plan is to then put these to a referendum.
As the upheaval in Egypt sent shock waves around the Middle East, troubling global financial markets worried about oil supplies, clashes broke out in Bahrain and Yemen, neighbors of the world's biggest oil exporter Saudi Arabia.
Thousands of Iranians opposed to their government rallied in support of the uprisings in Egypt and Tunisia on Monday.
MUSLIM BROTHERHOOD ON TV
Existing political groupings are mostly 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," the Brotherhood said in a new statement.
Signaling the transformation in Egypt, state television aired an interview with senior Muslim Brotherhood member Essam el-Erian, something unimaginable in the Mubarak era.
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" and said it has serious disagreements with it.
Pro-democracy leaders plan a big "Victory March" on Friday to celebrate the revolution -- and perhaps also to remind the military of the power of the street.
Uncertainty remains over how much influence the military will seek to exert in reshaping a corrupt and oppressive ruling system which it has propped up for six decades.
EMERGENCY LAWS
The military has promised free and fair elections, suspended the constitution and dissolved parliament, dismantling parts of the apparatus that kept Mubarak in power after he replaced Anwar Sadat, who was assassinated by Islamist radicals in 1981.
Wael Ghonim, a Google executive who had been detained for his part in the uprising, said military council members had told youth leaders that a referendum would be held on constitutional amendments in two months, a prelude to holding elections.
To placate pro-democracy activists, Egypt's army has pledged to lift a state of emergency in place throughout Mubarak's 30-year rule. Campaigners are impatient for this to happen soon.
On a public holiday for the Prophet Mohammad's birthday, Egypt paused for breath as the army sought to calm revolutionary fervor and get the country back to work. A dust storm deterred protests that have flared since Mubarak quit on Friday.
Facing a rash of pent-up labor demands from groups ranging from bank staff and tour guides to policemen and steelworkers, the new military rulers have urged people not to disrupt further an economy jolted by the 18-day uprising against Mubarak.
With anger smoldering over rising prices, low wages and economic hardships that afflict many of Egypt's 80 million people, the military faces a delicate balancing act in accommodating demands unleashed by the revolution.
Protests, sit-ins and strikes have broken out at state institutions across Egypt, including the stock exchange, textile and steel firms, media groups, the postal services and railways.
Raising wages and subsidies on basic goods are options the military could use to calm labor unrest, analysts said, though such measures would throw liberal economic reforms into reverse.
"There is this jubilation and exuberance of Egyptians, but the reality is there are more uncertainties than before," said John Sfakianakis, chief economist at Banque Saudi Fransi.
MAELSTROM OF MUBARAK RUMOURS
In Tahrir Square, scene of clashes between protesters and police during the revolt, traffic flowed freely on Tuesday. Army tanks and armored vehicles around the square and other Cairo locations have now been sandbagged into position.
Mubarak, 82, has not been seen in public since he resigned. He is thought to be in the Red Sea resort of Sharm el-Sheikh, where some tourists are still holidaying despite the turmoil.
With Mubarak at his seaside residence, Egyptians traded rumors about his health. Some said he was in a coma and others that he had gone for medical treatment to Germany, where he had gall bladder surgery last March.
But a source close to his family said: "He's in Sharm. and I know for sure he's in good health and he is with his family."
The United States, Britain and France said on Monday Egypt had asked them to freeze the assets of former officials. Paris and Washington said Mubarak was not on the list of officials.
(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 Alistair Lyon and Angus MacSwan)