At least 51 people were killed on Monday when demonstrators enraged by the military overthrow of Egypt's elected Islamist president said the army opened fire during morning prayers outside the Cairo barracks where Mohamed Mursi is believed held.
But the military said "a terrorist group" tried to storm the Republican Guard compound and one army officer had been killed and 40 wounded. Soldiers returned fire when they were attacked by armed assailants, according to a military source.
In the deadliest incident since Mursi's removal, emergency services said more than 430 were wounded.
Mursi's Muslim Brotherhood urged people to rise up against the army, which they accuse of a military coup to topple the leader, threatening an escalation in Egypt's political crisis.
At a hospital near the Rabaa Adawiya mosque where Islamists have camped out since Mursi was toppled on Wednesday, rooms were crammed with people wounded in the violence, sheets were stained with blood and medics rushed to attend to the wounded.
"They shot us with teargas, birdshot, rubber bullets - everything. Then they used live bullets," said Abdelaziz Abdel Shakua, a bearded 30-year-old who was wounded in his right leg.
As an immediate consequence of the clash, the ultra-conservative Islamist Nour party, which initially backed the military intervention, said it was withdrawing from talks to form an interim government for the transition to new elections.
A spokesman for the interim presidency, Ahmed Elmoslmany, said work on forming the government would go on, though Nour's withdrawal could seriously undermine efforts at reconciling rival factions: "What happened will not stop steps to form a government," he said.
The military has said that the overthrow was not a coup, and it was enforcing the will of the people after millions took to the streets on June 30 to call for Mursi's resignation.
But pro- and anti-Mursi protests took place in Cairo, Alexandria and other cities, and resulted in clashes on Friday and Saturday that left 35 dead.
It leaves the Arab world's largest nation of 84 million people in a perilous state, with the risk of further enmity between people on either side of the political divide while an economic crisis deepens.
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