On one of Egypt's most sensitive issues: bread.

Egypt faces struggle to maintain cheap bread program

Egypt is treading a fine line in efforts to stave off a potential crisis in its subsided bread program as the cash-strapped government buys wheat on international markets for the first time since February and imported stocks hit historically low levels.

Millers and bakers in the world's largest wheat importing nation say stocks of imported international wheat have sunk to levels that could reduce the availability of the flour they need to produce bread of an acceptable quality.

Read the full report by Sarah McFarlane and Maha El Dahan here.

REUTERS: EGYPT AUTHORITIES PLACE TRAVEL BAN ON PRESIDENT MOHAMED MURSI, OTHER TOP BROTHERHOOD MEMBERS- SECURITY SOURCES

U.S. defense secretary called Egypt's army chief Tuesday -Pentagon

WASHINGTON - U.S. Defense Secretary Chuck Hagel called Egyptian army chief General Abdel Fattah al-Sisi on Tuesday and the two also spoke last week, the Pentagon said on Wednesday, declining to offer details of the conversations.

Asked why the Pentagon had previously declined to disclose the calls, spokesman George Little told reporters: "I think you can understand the sensitivities of this situation and that's in essence the bottom line."

"We made a decision to acknowledge the phone call and that's where we are."

(Reporting by Phil Stewart and David Alexander; Editing by Eric Beech)

Wary of Mursi, Gulf Arabs keen to appear neutral in Egypt crisis

DUBAI/RIYADH - Gulf Arab rulers are resisting the temptation to gloat in public about the political woes of Egypt's Muslim Brotherhood, a group most of them mistrust, for fear of deepening unrest in a country that remains a potential ally in their standoff with Iran.

Officials and analysts said official Gulf Arab silence reflected a longstanding belief among the mainly small, U.S.-allied Sunni Muslim-ruled oil producers that their security is closely linked to that of Egypt, the most populous country in the Arab World, which is also Sunni.

For most of the past 30 years Egypt has been a strategic ally for Gulf Arab states worried about being dominated by the much bigger, Shi'ite Muslim Islamic Republic across the Gulf.

Now, with the stakes so high and Egypt's situation so volatile, the official thinking seems to be that public meddling might only make things worse, analysts say.

Read the full article by Sami Aboudi and Angus McDowall here.

Human Rights Watch Executive Director Kenneth Roth tweets Egyptian police are "abdicating their duty to protect protesters and stop violence." Read the full report here: With ongoing chaos and violence in Egypt, where are the police?

Egypt's turmoil puts Obama in precarious position

Washington and its ambassador in Cairo have emerged as lightning rods. Those calling for the dismissal of Morsi say the United States became too cozy with the Muslim Brotherhood, the political and social movement that brought the Islamist leader to power. The Brotherhood, meanwhile, warns that the United States is failing to speak out loudly and clearly against a military coup in the making.

- Ernesto Londoño in The Washington Post.

Egypt army meets with religious, other figures

The general command of the Egyptian armed forces is meeting with religious, national, political and youth figures, the army said on its official Facebook page on Wednesday, as a deadline loomed for President Mohamed Mursi to yield to mass protests and share power or give way.

"The General Command of the Armed Forces is currently meeting with a number of religious, national, political and youth icons ... There will be a statement issued from the General Command as soon as they are done," the army said.

(Reporting by Asma Alsharif; Writing by Tom Perry; Editing by Alastair Macdonald)

Suez Canal secured, unaffected by Egypt events -statement

The Suez Canal waterway is completely secure and the rate of ships passing through is normal, the head of the Suez Canal Authority Mohab Memish said in a statement on Wednesday.

"The average number of passing ships in term of quantity and cargo is in the normal range and has not been affected by any events," he said.

Egypt has been facing mass demonstrations since June 30 by opposition calling for the resignation of Islamist President Mohamed Mursi and his supporters which resulted in dozens of deaths and hundreds of injuries.

In the last two days, 80 ships passed through the canal, the authority said, close to the daily average of 40 to 50 vessels.

(Reporting by Asma Alsharif; Editing by Paul Taylor)

Muslim Brotherhood party refuses to meet Egypt army chief

The political wing of Egypt's ruling Muslim Brotherhood refused an invitation to meet the armed forces commander on Wednesday, hours before an army deadline for Islamist President Mohamed Mursi to yield to mass protests or quit, military and party sources said.

"We do not go to invitations (meetings) with anyone. We have a president and that is it," said Waleed al-Haddad, a senior leader of the Freedom and Justice Party told Reuters.

(Reporting by Asma Alsharif; Editing by Paul Taylor)

Mursi thinks better to "die standing like tree" - aide

A spokesman for Mohamed Mursi said the president believed it would be better to die "standing like a tree", defending the electoral legitimacy of his office, than to go down in history as having destroyed Egyptians' hopes for democracy.

Saying that Mursi was not seeking to cling to office for its own sake, spokesman Ayman Ali told Reuters that, in his overnight speech to the nation, the president had defied calls to resign in order to "defend the democratic system".

"It is better for a president, who would otherwise be returning Egypt to the days of dictatorship, from which God and the will of the people has saved us, to die standing like a tree," Ali said, "Rather than be condemned by history and future generations for throwing away the hopes of Egyptians for establishing a democratic life."

(Reporting by Tom Perry; Editing by Alastair Macdonald)

The Egyptian president's spokesman says it is better for Mursi to die in defence of democracy than be blamed by history - statement

Mursi's hardline allies call on him to give ground

By Tom Perry

CAIRO - Egyptian President Mohamed Mursi's hardline Islamist allies in al-Gamaa al-Islamiya want him to call a referendum on early presidential elections to avoid bloodshed and a military coup, Tarek al-Zumar, a senior member of the group said on Wednesday.

The former armed group that is one of Mursi's few remaining allies has been advising the head of state to call for the vote in the two days since the army issued a deadline for politicians to resolve the political conflict by Wednesday.

"We find ourselves faced with the necessity of convincing the president to accept a referendum on early presidential elections," Zumar told Reuters in a telephone interview. "This is what we hope will be reached in the next few hours."

Mursi did not propose the idea of an early presidential election a speech to the nation on Tuesday, calling instead for parliamentary polls.

But Zumar, asked if he was calling for early presidential elections, answered: "Yes, and that is to preserve the constitution and so that the situation of Egyptians does not deteriorate more than it already has."

"This peaceful, constitutional transfer (of power) will spare blood," Zumar said, adding that it would also protect the constitution that was passed into law in December.

He said the army's statements appeared to presage a coup, but this "can be avoided if the president decides to hold a referendum on early presidential elections".

Asked if he feared more violence unless a solution is agreed, Zumar said: "Of course, there are many parties that playing with Egypt's security, and which want to exploit the current moment to set off sectarian struggles and civil wars."

The Gamaa Islamiya, which renounced the armed struggle more than a decade ago and formed a political party after the 2011 uprising that overthrew Hosni Mubarak, has taken part in recent rallies in support Mursi.

The president's appointment of a Gamaa Islamiya member as governor of the historic central city of Luxor, where the group staged its bloodiest attack on foreign tourists in 1997, fuelled anger at Mursi ahead of protests demanding he resign.

Indicating differences of opinion within the Gamaa Islamiya over the next step, the group later issued a statement denying it had called for an early presidential elections.

"Any solution will be in the framework of legitimacy. But any directives or pressure or announcement of a road map from the military establishment, is a matter with very, very serious consequences," Safwat Abdel Ghani, another member of the movement, said on state TV.

(Reporting by Tom Perry; Editing by Paul Taylor)

Egyptian opposition leader ElBaradei is meeting with army chief Al-Sisi - opposition sources

CAIRO - Egyptian liberal opposition leader Mohamed ElBaradei met army chief General Abdel Fattah al-Sisi on Wednesday, two political sources said, hours before an army deadline for Islamist President Mohamed Mursi to yield to mass protests or quit.

ElBaradei was chosen to represent the opposition National Salvation Front coalition and youth groups leading anti-Mursi street protests to negotiate with the army on their behalf.

"In the meeting, ElBaradei will urge the armed forces to intervene to stop the bloodshed," one opposition source said.

More than 20 people have died and hundreds have been injured in clashes between Mursi's supporters and opponents since the eruption of mass protests on June 30.

(Reporting by Yasmine Saleh and Asma Alsharif, writing by Yasmine Saleh; Editing by Paul Taylor)