Middle East

Egypt unrest: Protesters frustrate normalisation effort

Attempts to return Egypt to normality after two weeks of deadly anti-government protests have suffered a number of setbacks.

While banks have reopened, schools and the stock exchange remain closed, and protesters have prevented the re-opening of a major government building.

The Egyptian cabinet has announced a 15% rise in public-sector salaries and pensions, effective from April.

But the protesters continue to occupy Cairo's Tahrir Square.

They say they will only leave when President Hosni Mubarak stands down.

Some spent the night in or under army vehicles, to stop efforts to move them.

Arms exports

The Egyptian government is selling $2.5bn (£1.55bn) in short-term debt, after having cancelled auctions last week. It is seeking to revive an economy said to be losing at least $310m a day.

However, the Cairo stock exchange, which was originally supposed to re-open on Monday, will now not resume trading until Sunday 13 February. It has been closed since 27 January, when 70bn Egyptian pounds (£7.3bn; $12bn) was wiped off shares over two days.

The Egyptian cabinet - reshuffled on 31 January, when President Mubarak sacked several ministers - met in its new form for the first time on Monday afternoon and agreed to raise public-sector salaries and pensions by 15%.

Finance Minister Samir Radwan allocated about 6.5bn Egyptian pounds (£677m; $960m) to cover the increases for six million employees.

Meanwhile, Germany has announced it will not export any more arms to Egypt until further notice.

The German economy ministry says it is acting over concerns about Egypt's human rights record. Last year, Germany sold 22 million euros' (£18.5m; $30m) worth of arms to Egypt.

Export permits already granted are to be re-investigated, the ministry said in a statement.

Opposition unhappy

On Monday morning, crowds of protesters on Tahrir Square formed a human chain around the Mugamma - where people go to get official paperwork processed - to prevent it from opening as normal.

The BBC's Jon Leyne in Cairo says the protesters were in a face-off with some soldiers, but as the army has been instructed not to use force, the situation was in deadlock - symptomatic of the whole country.

As the crisis enters its third week, ordinary people are worried that prices for ordinary goods like bread have risen sharply, and show no signs of coming back down.

Egyptian state TV has announced that the curfew is being relaxed. It will now run from 2000 to 0600 local time (1800-0400 GMT). However, the curfew has been widely flouted since it was introduced 10 days ago.

Talks on Sunday between the Egyptian government and opposition groups on tackling the country's political crisis failed to end the protests.

The government offered a series of concessions, but the opposition said they were not enough.

President Mubarak has so far refused to resign, saying that to do so would cause chaos. He has instead said he will not stand for re-election in September.

In a separate development, one Egyptian security officer was injured when four rocket-propelled grenades were fired at a security forces barracks in Rafah on the Gaza Strip border, officials said.

It was not immediately clear who was behind Monday morning's attack, which Egyptian state television blamed on "extremist groups aiming to undermine security".