* ElBaradei says fears protests will turn more violent
* U.S. backs gradual, orderly change
(Adds ElBaradei comments)
By Tom Perry and Sherine El Madany
CAIRO, Feb 5 Unrest in Egypt could turn
increasingly vicious, leading opposition activist Mohamed
ElBaradei warned on Saturday, as President Hosni Mubarak clung
to power after 12 days of demonstrations.
Mubarak has reshuffled his government, and the leadership of
his party resigned on Saturday, but the 82-year-old president
insists he will stay in office until September polls.
Fearing instability in the most populous Arab nation where
Islamists are the most organised opposition, the United States,
Egypt's key ally and aid donor, is emphasising gradual change
and the need for talks between the government and opposition
groups to forge agreement on an orderly handover of power.
U.S. Secretary of State Hillary Clinton threw her weight
behind talks between Mubarak's handpicked vice president, Omar
Suleiman, and opposition groups, saying the government's fragile
dialogue with the opposition must be given time to unfold.
"There are forces at work in any society, and particularly
one that is facing these kinds of challenges, that will try to
derail or overtake the process to pursue their own specific
agenda," Clinton told a security conference in Munich.
She did not name the forces, but Washington has expressed
concern about any involvement of militant Islamist elements.
"Which is why I think it's important to support the
transition process announced by the Egyptian government,
actually headed by now Vice President Omar Suleiman."
ElBaradei said it would be a "major setback" if the United
States were to support either Mubarak or Suleiman to lead a
transitional government to oversee change.
TRANSITION OR BLOODSHED?
Demonstrations in Cairo's Tahrir Square on Saturday were
smaller than Friday's huge protest by hundreds of thousands
billed as the "Day of Departure" for Mubarak, but there were
still queues at an army checkpoint to get into the square.
A key test will be whether the momentum of protest can be
maintained when the working week begins again on Sunday.
The Egyptian government appears to trying to emphasise the
threat to stability and the economy posed by the protests, and
tough it out, hoping the demonstrations will fade away.
ElBaradei said he did not think the protests were running
out of steam and worried the situation could get even bloodier.
"There is of course a little fatigue everywhere," he told
Reuters, adding that there was a "hard core" of demonstrators
who would not give up as long as Mubarak held onto power.
"It might not be every day but what I hear is that they
might stage demonstrations every other day," ElBaradei said.
"The difference is that it would become more angry and more
vicious. And I do not want to see it turning from a beautiful,
peaceful revolution into a bloody revolution."
U.S. President Barack Obama has urged Mubarak to "make the
right decision" and U.S. officials have over the past week
indicated they believe his days in power may be numbered.
But Clinton, seeking to place renewed emphasis on the
process of political transition, underscored the U.S. view that
it will take both time and patience to lay the groundwork for
truly democratic new elections to take place.
"Our view is the early discussions are the right thing for
the government to have initiated and now the opposition should
get involved in them to test the proposition that the government
is serious," said one senior U.S. official.
Suleiman is due to meet opposition groups at 11:00 a.m (0900
GMT) on Sunday in talks joined for the first time by the Muslim
Brotherhood, Egypt's most influential and organised opposition
group. They are to discuss the process of Mubarak leaving office
and the right to protest freely and safely.
A proposal being promoted by a group of Egyptians calling
itself the "The Council of Wise Men" involves Suleiman assuming
presidential powers for an interim period pending elections.
But some opposition figures argue that would mean the next
presidential election would be held under the same unfair
conditions as in previous years. They want to first have a new
parliament to change the constitution to pave the way for a
presidential vote that is democratic.
For all stories on the crisis, click on [nLDE70O2DA]
Mubarak interview with ABC link.reuters.com/red87r
Protest timeline link.reuters.com/zyc77r
For graphics, click on r.reuters.com/nym77r
Live Blog here
Column on effect on Egypt's financial system [nLDE7120R1]
With some protesters insisting they want not just Mubarak
but also his allies out straight away, moves to keep the veteran
president in office are unlikely to go down well.
An Egyptian army commander was shouted down when he tried to
persuade thousands of demonstrators at Tahrir Square to stop a
protest that has stalled economic life in the capital.
"You all have the right to express yourselves but please
save what is left of Egypt. Look around you," Hassan al-Roweny
said through a loud speaker and standing on a podium.
The crowd responded with shouts that Mubarak should resign.
Roweny then left, saying: "I will not speak amid such chants."
Egypt's economy is already suffering. Growth, which was
running at 6 percent, will be hit, said Central Bank Governor
Farouk el-Okdah. There will also be movement in the Egyptian
pound, he said, but the bank has enough reserves to cope.
Exports fell six percent in January because of the mass
protests and curfew, Trade Minister Samiha Fawzi Ibrahim said.
A Credit Agricole report said the crisis was costing Egypt about
$310 million a day.
Many shops have been closed during 12 days of protests and
banks have been shut, making it hard for Egyptians to stock up
on basic goods. Some prices have been pushed up.
Saboteurs blew up a gas pipeline in northern Egypt
overnight, disrupting flows to Israel and also to Jordan, where
protesters angered by economic hardship have been demanding a
more democratic political system.
Islamist websites had called for attacks on the pipeline.
The United Nations estimates 300 people have died in the
unrest and the health minister has said around 5,000 people have
been wounded since Jan. 25.
(Reporting by Edmund Blair, Samia Nakhoul, Patrick Werr, Dina
Zayed, Marwa Awad, Shaimaa Fayed, Alexander Dziadosz, Yasmine
Saleh, Sherine El Madany, Yannis Behrakis, Jonathan Wright,
Andrew Hammond, Tom Perry and Alison Williams in Cairo, writing
by Jonathan Hemming, editing by Myra MacDonald)