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President Mohamed Morsi offeredopponents a say on Wednesday in amending a controversial newconstitution and a forum to seek "national reconciliation", ashe sought to avert a violent showdown in the streets.
In a televised address lasting more than two and a halfhours, the Islamist head of state blamed loyalists of fallendictator Hosni Mubarak for the "paralysis" that has marked hisfirst year in office but also offered an olive branch toopponents that also seemed to address demands from the army.
He said he was inviting party leaders to meet on Thursday tochoose a chairman for an all-party committee that would prepareamendments to the constitution. It was pushed through areferendum late last year with Islamist support, but many in theopposition say the document is flawed and biased against them.
Morsi also said he was forming a committee of leading publicfigures to promote"national reconciliation".
"I say to the opposition, the road to change is clear,"Mursi said, pointing to parliamentary elections expected laterthis year. "Our hands are extended."
The head of the armed forces warned this week that themilitary could step back in if politicians failed to end thepolarised deadlock that has caused violence in the streets -including two deaths and scores of injuries on Wednesday.
Liberal opponents are hoping millions heed a call to rallyon Sunday, the first anniversary of Mursi's inauguration, todemand he step down. Islamists have also been putting on showsof strength and plan another major demonstration on Friday.
Mursi called for calm: "I say to all those planning to taketo the streets to keep the protests peaceful and not be draggedinto violence as violence will only lead to violence. Protestsare a way of expressing an opinion - not imposing one".
Earlier in his speech, Morsi admitted errors and offeredreform but was otherwise uncompromising in his denunciation ofthose he blamed - some by name - for wanting to "turn the clockback" to before the 2011 revolution against Mubarak.
Interrupted by occasional cheers from Islamist supporters,Morsi told an audience that also included the head of the armythat many of the difficulties of his first year in office weredue to the continued influence of corrupt Mubarak-era officials.
"I took responsibility for a country mired in corruption andwas faced with a war to make me fail," he said, naming somesenior officials, including the man he beat in last year'spresidential run-off, as well as neighbourhood "thugs". He alsoslammed some owners of hostile media, accusing one of tax fraud.
Some enemies were abroad, he said, without elaborating.
Morsi acknowledged the hardships many of the young who sawhope in the revolution have had in an economy mired in crisisand offered them reforms and, in time, a higher minimum wage andreductions in unemployment, targeting a drop to 8 percent.
He said he wanted young people to be more involved inpolitics and promised parliamentary elections.
In a swipe at opponents who have failed to match his MuslimBrotherhood's disciplined approach to winning elections, he saidpoliticians who failed to accept his offers to cooperate hadleft young people with no outlet for opposition but the street.
"Political polarisation and conflict has reached a stagethat threatens our nascent democratic experience and threatensto put the whole nation in a state of paralysis and chaos," hesaid. "The enemies of Egypt have not spared effort in trying tosabotage the democratic experience."
Hours before he spoke, two people were killed and more than200 were treated for injuries in the city of Mansoura, north ofCairo, when Islamist supporters clashed with their opponents -the latest street fighting over the past few days that many fearmay presage a massive showdown in the streets this weekend.
Witnesses heard gunfire and state television showed a man inhospital with birdshot wounds.
Overnight, there were also clashes in Alexandria.
The army has warned politicians it could effectively takecharge again if they fail to find consensus. Some in theanti-Morsi camp might welcome that, but militants say they wouldfight any "coup" against Egypt's first freely elected leader.
Fears of a violent stand-off in the streets between Mursi'sIslamist supporters and a broad coalition of the disaffectedhave led people to stock up on food. Long lines of cars outsidefuel stations have snarled roads in Cairo and other cities.
Some observers fear Egypt may be about to erupt again, twoyears after the revolution that toppled Mubarak. Politics arepolarised between Mursi's disciplined Muslim Brotherhood anddisparate opponents who have lost a series of elections.
The deadlock has contributed to a deepening economic crisisand the government is running out of cash.
Liberal critics worry about Islamist rule - a coalition oflocal human rights groups accused Morsi's Muslim Brotherhood onWednesday of crimes rivalling Mubarak's and of setting up a"religious, totalitarian state". But many Egyptians are simplyfrustrated by falling living standards and fear chaos.
The army is held in high regard by Egyptians, especiallysince it pushed aside Mubarak following the 2011 uprising.
One senior Western diplomat in Cairo said the army might tryto impose a solution, especially if the political deadlock turnsviolent: "The margin for a political solution is definitely verynarrow," he said. "If (violence) crosses a certain threshold,the role of the army might become by default more proactive."
Militants, oppressed for decades, fear a return of militaryrule and hardliners warn of a fight if the generals intervene.They accuse Mubarak-era institutions, including courts, statemedia, police and civil service, of working to undermine Mursi.
An officer in one of Egypt's internal security agencies toldReuters this week that the country needed to be "cleansed" ofthe Islamists who he described as terrorists.
The army, still heavily funded by Washington as it was underMubarak, and Western governments have been urging Mursi tobridge differences with his non-Islamist opponents. He says hehas tried. They say he and his Muslim Brotherhood, along withharder line allies, are trying to monopolise the state.
At the International Crisis Group, Egypt analyst YasserEl-Shimy said he still doubted the army wanted, or would try, totake control and was more likely to push parties to compromise.
"What is going to be a game changer," he said, "is whetherthe violence is so massive or out of control that the governmentis unable to function - which might be a scenario that some arehoping for in order to prompt the military to intervene."
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