Egypt army, Islamists in talks to resolve impasse

CAIRO (Reuters) - Egypt's war of words between the ruling generals and Islamists who paraded their popular strength on the streets on Friday may be resolved by discreet negotiations going on between the two old enemies behind the scenes.

Senior figures on both sides told Reuters they had several meetings during a past week marked by confrontation over moves by the army before and after the presidential election which opponents said were aimed at entrenching military rule.

A further meeting, as early as Saturday, may be followed by an announcement of the election result - the Muslim Brotherhood claims it has won. A compromise may help pull protesters off the streets and usher in a new phase of the wary power-sharing that has marked Egypt's passage from revolution to democracy.

Such an outcome would probably be welcomed by the United States, the long-time sponsor of the army during decades of military rule under Hosni Mubarak, which has called on the army to honor a promise of civilian government but shares some of its fears about handing untrammeled power to the Islamists.

"We have met with them to discuss how to get out of this crisis after parliament was dissolved and the new president's powers curbed," Khairat al-Shater, who runs the Brotherhood's finances and strategic planning, told Reuters late on Thursday.

"But the generals feel they are the proprietors of power and have not yet reached a level of real compromise."

Major General Mamdouh Shaheen, a member of the Supreme Council of the Armed Forces (SCAF) which took sovereign power from Mubarak, confirmed the recent meetings and repeated the army's commitment to a democratic transition.

But he echoed a strong statement issued by SCAF on Friday as the Islamists packed Cairo's Tahrir Square. It rejected the Brotherhood's call for the cancellation of a June 17 decree that gave extra powers to the military council after the election of a civilian president and said it was necessary for the interim.

"The constitutional decree is the exclusive authority of the military council," Shaheen told Reuters, also late on Thursday.

That decree followed the dissolution of a parliament elected in January with an Islamist majority. The army says its move was dictated by judges who found that some voting rules had been unconstitutional. By decree, SCAF took over legislative power until a new constitution is in force, effectively limiting the new president's ability to rule without military approval.

RESULT STILL UNCLEAR

Officials on both sides, and among those engaged in running the presidential election, insisted the result of the run-off vote itself was not being bargained over. A delay in giving the result, between the Brotherhood's Mohamed Morsy and former general Ahmed Shafik, was due to a large volume of appeals and allegations of irregularities, as the electoral commission says.

However, much of the negotiation in recent meetings between military and Brotherhood leaders seems based on an assumption of Morsy winning. While that is not certain to happen, sources in the military and the electoral commission have consistently told Reuters since the weekend vote that Morsy is ahead in the count.

A senior state official involved in overseeing the national vote tally - though not in the electoral commission - said that the delay in announcing the election result, while genuinely the result of large numbers of appeals by the candidates, had bought valuable time as the military and Brotherhood negotiated.

"There has definitely been the process involved in tallying the official vote before announcing results," he told Reuters on Friday. "But there is also the politicking behind the scenes, with each side weighing up the strength of the other.

"The Brotherhood can draw millions of disciplined supporters onto the streets and the army has a mandate to ensure order."

Compromise is not easy between arguably Egypt's two most powerful institutions, who share a long, violent history that is written into the life stories of those at the negotiating table.

But in the 16 months since the generals pushed aside their old commander Mubarak to appease the demonstrators, a level of cooperation has developed - one that has dismayed many of those who want neither entrenched military nor religious rule.

The cooperation frayed in recent months, as the Brotherhood stepped up its ambitions, fielding more candidates to take a bigger share of parliament than it had planned, then reversing a decision not to seek the presidency. Shater himself was the favored candidate, before he was disqualified by a court.

The apparent frequency of contact this week, even as the public rhetoric between the two sides has sharpened, may suggest that cooperation may continue in the months to come.

MUTUAL SUSPICION

Each side fears the other having total control, not only in formal government institutions but through informal ties in, for example, the judiciary, major businesses and indeed inside the military itself, where some officers are sympathetic to the Islamists. The Brotherhood sees a "deep state" left intact after Mubarak. The army fears an Iranian-style clerical takeover.

Much of the discussion between them has been over how far the SCAF builds in to the developing constitutional arrangements new limits on the powers of various arms of the state.

The generals, mistrustful of the Islamist group's long-term plans, say they cannot relinquish power before Egypt has a new constitution, over which they intend to have a considerable say before it goes to a vote, to guarantee their interests.

Shaheen, one of those most involved in drafting interim laws, said he wanted to "ensure a balanced political process".

The United States has also stressed that, while it wants a free election, it also wants to ensure that it is not the last election before some form of theocracy takes over nor won by a group which might abuse human rights by majority will.

Privately, another member of the military council, said he and his colleagues were worried about "inexperienced civilians in command who could steer the state in the wrong direction".

That is an attitude which frustrated Shater: "They meet with us and others; they say what they want to say; they listen a little. But at the end of the day they do what they want."

CONSTITUTION

Effectively, SCAF has shown it will not tolerate Islamists controlling both parliament and the presidency, and with those institutions, the constitutional drafting process.

"The army would be in trouble if an Islamist bloc gained traction in the country," the senior state official involved in the election said. "Any bloc is a threat to its prerogatives.

"There is a specific role the Brotherhood must play in the coming period - and they must not go beyond it."

Having, dispensed with the legislature, the military council has shorn the post of head of state, last occupied by Mubarak, of many of its trappings, not least its own budgetary control - now run by a general appointed by SCAF head Field Marshal Hussein Tantawi - and its once independent military unit, the Republican Guard, whose disbandment was announced on Friday.

While the Brotherhood has said it rejects the new decree and the dissolution of parliament, it has also offered a negotiating position: since the court's problem with the parliamentary election concerned only a third of the seats, then those members should be barred, while the rest of the legislature still meets.

"This would at least solve 75 percent of the problems we find with the decree, which gives the military council a veto over everything," Shater said.

But the military council, which says it cannot overturn the decision of the court, has resisted that. The state official dismissed the Brotherhood's proposal for parliament as a "maneuver", and reflected an unrealistic attitude to the negotiations, in which the army would keep the upper hand.

On the military council itself, one member said: "You have to remember that Egyptian political forces are at the early stages of democracy," he said.

"Many mistakes were made and there is much to be learned."

(Editing by Alastair Macdonald)

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