Cabinet spokesman Mohamed Hegazy announced that Prime Minister Essam Sharaf’s entire cabinet had tendered its resignation on Sunday.
Al Jazeera television later said the ruling military council had accepted the government’s resignation, but there was no official announcement of the council's decision.
Egypt’s military council is seeking agreement on a new prime minister before it accepts the resignation submitted by the cabinet, a military source told Reuters on Monday.
The source said no formal announcement would be made until the ruling military council had agreed on the candidate. He did not provide further details.
Overnight Sunday and on Monday, Cairo police fought protesters demanding an end to army rule.
As night fell on Monday, thousands of people packed Tahrir Square, the epicenter of the anti-Mubarak revolt in January and February. The clashes threaten to disrupt Egypt’s first free parliamentary election in decades, due to start next Monday.
“The people want the fall of the marshal,” they chanted, referring to Field Marshal Mohamed Hussein Tantawi, Mubarak’s defense minister for two decades and head of the army council.
Clashes flared in side-streets near Tahrir. Witnesses said looters, not necessarily connected to the protests, had attacked the American University in Cairo and other buildings.
Protesters have brandished bullet casings in the square, where police moved in with batons and tear gas on Saturday against a protest then dominated by Islamists but since driven by young people with secular aims. Police deny using live fire.
Medical sources at Cairo’s main morgue said 33 corpses had been received since Saturday, most with bullet wounds. One source at the morgue said the toll had risen to 46. At least 1,250 people have been wounded, a Health Ministry source said.
“I’ve seen the police beat women my mother’s age. I want military rule to end,” said protester Mohamed Gamal, 21.
Army generals were feted for their part in easing Mubarak out, but hostility to their rule has hardened since, especially over attempts to set new constitutional principles that would keep the military permanently beyond civilian control.
Police attacked a makeshift hospital in Tahrir Square after dawn but were driven back by protesters hurling chunks of concrete from smashed pavements, witnesses said.
“Don’t go out there, you’ll end up martyrs like the others,” protesters told people emerging from a metro station at Tahrir Square.
The violence casts a pall over the first round of Egypt’s staggered and complex election process, which starts on Nov. 28 in Cairo and elsewhere. The army says the polls will go ahead.
The United States called for restraint on all sides and urged Egypt to go ahead with the elections despite the violence.
“The United States continues to believe that these tragic events should not stand in the way of elections,” White House spokesman Jay Carney said.
In an apparent sop to protesters, the army council issued a law to bar from political life “those who work to corrupt political life and damage the interests of the nation.”
The announcement was unlikely to satisfy political parties and activists who have called for a blanket ban on former members of Mubarak’s now defunct National Democratic Party.
“This is a meaningless move by the military council. In fact this is a slap in the face of protesters and those who died to demand freedom and respect,” said activist Mohamed Fahmy. “The council is out of step with the people.”
Some Egyptians, including Islamists who expect to do well in the vote, say the ruling army council may be stirring insecurity to prolong its rule, a charge the military denies.
As international concern mounted over the unrest in Egypt, German Foreign Minister Guido Westerwelle called for an end to the violence. “This is quite evidently an attempt to thwart a democratic transition process,” he said.
British Foreign Secretary William Hague said Egypt was at a “dangerous moment” and called for a clear transition timetable.
UN Secretary-General Ban Ki-moon deplored the loss of life in the past few days, a spokesman said, adding that he “calls on the transitional authorities to guarantee the protection of human rights and civil liberties for all Egyptians, including the right to peaceful protest.”
Political uncertainty has gripped Egypt since Mubarak’s fall, while sectarian clashes, labor unrest, gas pipeline sabotage and a gaping absence of tourists have paralyzed the economy and prompted a widespread yearning for stability.
The instability could accelerate Egypt’s slide toward a currency crisis, forcing a sharp depreciation of the Egyptian pound in the next few months and conceivably prompting Cairo to impose capital controls, analysts said.
“The violence and political noise is going to erode whatever confidence was left in the Egyptian economy, and may result ... in an acceleration of capital outflows,” said Farouk Soussa, Middle East chief economist at Citigroup.
The military plans to keep its presidential powers until a new constitution is drawn up and a president is elected in late 2012 or early 2013. Protesters want a much swifter transition.
The army said on Monday it had intervened in central Cairo to protect the Interior Ministry, not to clear demonstrators from nearby Tahrir Square, whom it also offered to protect.
“The protesters have a right to protest, but we must stand between them and the Interior Ministry,” said General Saeed Abbas. “The armed forces will continue in their plans for parliamentary elections and securing the vote.”
The Interior Ministry, in charge of a police force widely hated for its heavy-handed tactics in the anti-Mubarak revolt, has been a target for protesters demanding police reform.
The latest street clashes show the depth of frustration, at least in Cairo and some other cities, at the pace of change.
Security forces fired tear gas at about 2,000 protesters gathered at a security compound in the coastal city of Alexandria, witnesses said.
Liberal groups are dismayed by the military trials of thousands of civilians and the army’s failure to scrap a hated emergency law. Islamists eyeing a strong showing in the next parliament suspect the army wants to curtail their influence.
Analysts say Islamists could win 40 percent of assembly seats, with a big portion going to the Muslim Brotherhood.
Mohamed El-Beltagy, a senior figure in the Brotherhood’s political party, was ejected by protesters when he tried to join them in Tahrir Square on Monday. They threw stones and bottles at him and said the Brotherhood was not among “the real revolutionaries,” the state news agency MENA reported.
The Revolution Youth Coalition, an activist group, called for a “million-man march” in Tahrir on Tuesday to back demands for a new national salvation government to run the country in the transition phase, instead of the military council.