Egypt army seeks national unity as crisis mounts

Egypt's army chief called for talks on national unity to end the country's mounting political crisis after a vital loan from the IMF was delayed and thousands of pro- and anti-government demonstrators took to the streets.

The meeting scheduled for Wednesday afternoon was called in response to an increasingly destabilising series of protests that has unfolded since President Mohamed Mursi awarded himself sweeping powers on Nov. 22 to push through a new constitution shaped by his Islamist allies in a referendum on Saturday.

Armed forces chief and Defence Minister Abdel Fattah al-Sisi called for a meeting of "national unity for the love of Egypt to bring together partners of the country in the presence of the president of the republic", the army spokesman said.

An aide said Mursi had supported the call for talks. The Muslim Brotherhood said it would be there, while the main opposition coalition said it would decide on Wednesday morning whether to attend.

Earlier, the finance minister disclosed that a $4.8 billion International Monetary Fund loan, a cornerstone of Egypt's economic recovery hopes, would be delayed until next month.

Mumtaz al-Said said the delay was intended to allow time to explain a widely criticised package of economic austerity measures to the Egyptian people.

The announcement came after Mursi on Monday backed down on planned tax rises, seen as essential for the loan to go ahead, but which the opposition had fiercely criticised.

"Of course the delay will have some economic impact, but we are discussing necessary measures (to address that) during the coming period," Said told Reuters, adding: "I am optimistic ... everything will be well, God willing."

Prime Minister Hisham Kandil said the measures would not hurt the poor. Bread, sugar and rice would not be touched, but cigarettes and cooking oil would go up and fines would be imposed for public littering. In a bid to rebuild consensus, he said there would be a public consultation about the programme next week.

In Washington, the IMF said Egypt had asked for the loan to be postponed "in light of the unfolding developments on the ground". The Fund stood ready to consult with Egypt on resuming discussions on the stand-by loan, a spokeswoman said.