CAIRO (Reuters) - Egypt's new military rulers dissolved parliament and suspended the constitution on Sunday but said they would govern only until elections to replace ousted president Hosni Mubarak, possibly in six months.
Troops, some wielding sticks, earlier took control of Tahrir (Liberation) Square, the fulcrum of the 18 days of protests that swept Mubarak from power on Friday. It let traffic flow through central Cairo as the army struggled to return life to normal.
The Higher Military Council, which took over after a revolt that changed modern Egyptian history and ended Mubarak's 30-year rule, promised a referendum on constitutional amendments in this key American ally in the Middle East.
The initial response from opposition figures and protest leaders was largely positive. "Victory, victory," chanted pro-democracy activists in Tahrir Square.
"It is a victory for the revolution," said Ayman Nour, who challenged Mubarak for the presidency in 2005 and was later jailed. "I think this will satisfy the protesters." A military statement read: "The higher council of the armed forces will manage the affairs of the country for a temporary period of six months or until the end of elections to the upper and lower houses of parliament, and presidential elections."
It gave no timetable for what will be a complex process. But setting an initial period of military rule at six months seemed to be an early indication of the generals' thinking on timing. No other body seems able to run the country before elections.
Egypt's constitution was written with built-in guarantees to keep Mubarak in power, elections were rigged in favour of his ruling party and opposition groups such as the Muslim Brotherhood were sometimes harassed, sometimes tolerated.
As the momentous events in Egypt continued to ripple across the region, demonstrators in Yemen, inspired by protests in Tunisia and Egypt, clashed with police blocking them from marching on Ali Abdullah Saleh's presidential palace.
ARMY IN COMMAND
Egypt's government now reports to the military as it did to Mubarak. The former air force commander was despised by many for ruling like a pharaoh, though he was once a hero for his role in the 1973 war with Israel and who steadied Egypt after the 1981 assassination of his predecessor Anwar Sadat.
Protest organisers were forming a Council of Trustees to defend the revolution and urge swift reform from a military intent on restoring law and order during the transition.
Any sign the army is reneging on its promises of democracy and civilian rule could reignite mass protests on 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.
People argued heatedly in Tahrir Square over whether to comply with army orders to leave. "The people want the square cleared," some chanted. "We will not leave!" countered others.
Police officers, emboldened by Mubarak's downfall, gathered outside the Interior Ministry to demand higher pay. Warning shots were fired in the air. No one was hurt.
Workers from the health and culture ministries staged demonstrations as Egyptians began venting pent-up frustrations.
Egypt declared Monday a bank holiday after workers disrupted operations at the country's main state banks.
The military is expected on Monday to ban meetings by labour unions or professional syndicates, effectively forbidding strikes, and to tell all Egyptians to get back to work.
There will also be a warning from the military against those who create "chaos and disorder," an army source said, adding the army would, however, acknowledge the right to protest. The cabinet met and, for the first time, the portrait of Mubarak did not gaze over its proceedings as Egyptians quietly removed once ubiquitous images of the 82-year-old former leader.
Protesters have demanded the release of political prisoners, the lifting of a state of emergency, the abolition of military courts, fair elections and a swift handover to civilian rule.
The army has said it would lift emergency law, used to stifle dissent under Mubarak, when "current circumstances end." But it has not specified a timetable.
Despite Mubarak's resignation, some protesters have said they plan to stay in Tahrir Square to ensure the military keeps its promises on transition. They have urged Egyptians to turn out in their millions for a "victory march" on Friday.
The military's strategy has been to calm the nation and the world about its intentions and, in the short term, to try to enforce the law after the disgraced police melted away, having failed to crush protesters with teargas and batons.
On Saturday, the army said it would uphold Egypt's international obligations. These include a peace treaty with Israel, whose defence minister has been in touch with his Egyptian counterpart, who heads the military council.
How to handle policing has become a pressing issue.
Interior Minister Mahmoud Wagdy has said Egypt needs "the speedy return of the police to duty," saying 13,000 inmates who escaped from prison early in the uprising were still on the run.
Some traffic police were back on Cairo streets beside soldiers and tanks guarding intersections and key buildings. But the minister said only one police officer in three was working.
BUSINESS AS USUAL...
Apparently seeking to reassure Egyptians that everything was under control, Prime Minister Ahmed Shafiq said government affairs were being presented to the Higher Military Council, "as they were presented to the president of the republic."
Shafiq was appointed by Mubarak when he sacked his former cabinet on January 29 in a vain effort to quell the uprising. His remarks were likely to anger Egyptians hoping Mubarak's ruling system would be dismantled immediately in the new era.
Shafiq said he believed Mubarak was in the Red Sea resort of Sharm el-Sheikh, and that the cabinet had not made any request to freeze the deposed president's assets abroad.
A British minister said there should be an international approach to dealing with Mubarak's overseas assets.
As more detail emerged about the tumult, a top Egyptologist said that treasures missing from the world-renowned Egyptian Museum on Tahrir Square included a statue of King Tutankhamun.
The military was clear in its instructions for Tahrir.
"We do not want any protesters to sit in the square after today," Mohamed Ibrahim Moustafa Ali, head of military police, said as soldiers removed protesters' tents from the square.
People chanted "peacefully, peacefully" as soldiers and military police in red berets moved in to disperse them. Scuffles broke out and some soldiers lashed out with sticks. Protesters said soldiers detained about 50 people.
The most committed protesters vowed to remain.
Jihad Laban, an accountant, said much work remained to make sure the revolution did not squander what it had gained.
"The goal was never just to get rid of Mubarak. The system is totally corrupt and we won't go until we see some real reforms. I am going to be buried in Tahrir. I am here for my children. Egypt is too precious to walk away now."
Mohamed ElBaradei, a retired U.N. diplomat who has been put forward as a reformist spokesman, urged the army to bring in civilians to take part in the transitional process:
"We need heavy participation by the civilians," he told CNN. "It cannot be the army running the show."
(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 Alastair Macdonald)