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Riot police fire tear gas at protesters during clashes near Tahrir Square in Cairo, on Tuesday.Khalil Hamra/The Associated Press

The chief of the Egyptian army has publicly cast doubt on President Mohammed Morsi's ability to run the country, setting the stage for a showdown between Egypt's powerful armed forces and its Islamist President at a time when large swaths of the country have descended into violent chaos.

Warning that ongoing street clashes and political deadlock leave the Egyptian state on the verge of "collapse," General Abdul-Fattah Al Sisi on Tuesday indicated the country's military – which ruled Egypt indirectly for decades until the 2011 revolution led to free elections – will not be a passive observer of the violence that has left more than 70 Egyptians dead and Mr. Morsi under siege.

"The continuation of conflict, and the differences among the various political groups on the management of the country's affairs, may lead to the collapse of the state," Gen. Al Sisi said in comments posted to the military's Facebook page, adding that the violence and political deadlock "threaten the future of coming generations."

The military's interjection in Egypt's domestic discourse along with its apparent decision not to enforce a curfew ordered by the President on several cities comes at the worst possible time for Mr. Morsi, whose legitimacy is in serious question as riots rage across Cairo and many other large cities. This week, many of the country's myriad opposition parties rejected his call for dialogue.

Violence in Cairo has also hit the country's vital tourism sector, and continuing clashes in the Suez Canal city of Port Said threaten the financially and strategically pivotal sea trade route.

The chaos has already forced Mr. Morsi to cancel a diplomatic trip to France, and another planned visit to Germany will also likely be postponed. Eight months after becoming Egypt's first democratically elected president, Mr. Morsi finds himself overseeing a country more in a state of crisis than of resurgence. Rather than reclaiming its place as the political power centre of the Middle East, Egypt continues to suffer from deeply fractured politics and an equally frustrated populace.

"First, the governance challenges are daunting," said Andrew Parasiliti, editor of Al-Monitor, which covers trends in the Middle East. He cited the official unemployment rate of 12 to 13 per cent but it is probably higher, and said at least 25 per cent of Egypt's 82 million people are living below the poverty line.

"Second, you have the Muslim Brotherhood in power – they have never governed before," he added. "They have an ideology and an agenda. The country is deeply divided. Third, you have the disappointment that the so-called Arab Spring has brought an Islamic revival and chaos, not true democracy.

"You can't disentangle these threads."

Gen. Al Sisi's comments on the potential collapse of the Egyptian state may signal that the military is preparing to take a more forceful role in a time of domestic chaos. The armed forces, once widely admired as a national institution despite close ties to the toppled regime, are seen by many Egyptians as opportunistic and eager to regain political power. Since the military-led coup in 1952, virtually all of Egypt's top leaders have emerged from within the ranks of the military. The military also runs many of the country's major industrial operations, making it a vital player in domestic affairs.

Mr. Morsi, a once-jailed leader of the Muslim Brotherhood, has taken steps to limit the military's powers. Last summer, he fired several senior military leaders and terminated a set of laws that gave the armed forces broad powers. At the time, many of Mr. Morsi's opponents praised the move as a way to shift the balance of power in favour of freely elected civilian bodies. Since then, however, it is Mr. Morsi who has faced the brunt of public criticism, while the military has remained relatively outside the spotlight.

Highlighting the government's weakening grip on public order, thousands of demonstrators took to the streets in Port Said on Tuesday in defiance of a government imposed emergency curfew. While police were present in the towns, neither they nor the army did much to stop the demonstrators.

Mr. Morsi imposed the curfew on cities and towns around the north end of the Suez Canal after at least 40 people died in protests sparked by a court ruling sentencing 21 residents to death in connection with soccer game riot that left more than 70 people dead one year ago.

But the verdict is just one catalyst. Clashes in and around Cairo's Tahrir Square between anti-Morsi protesters and police – two years after the uprising that ousted Hosni Mubarak – left parts of downtown Cairo again shrouded in tear gas and littered with damaged or torched vehicles and storefronts.

On Tuesday, looters burst into the lobby of the landmark InterContinental Semiramis hotel, damaging stores in the building before police arrived. The hotel, located on the banks of the Nile in downtown Egypt, is adjacent to Tahrir Square, and the attack on its lobby is likely to further damage the country's once-lucrative tourism industry.

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