Thousands of supporters of Egypt's ousted Islamist president Mohamed Morsi Thursday celebrated Eid al-Fitr, the end of the holy month of Ramadan, defying government calls for them to go home.
However there was no immediate sign the government was preparing to carry out its Wednesday threat to remove Islamist protest camps set up to demand Morsi's reinstatement following his ouster by the army on July 3.
Under a cloud of balloons, thousands of men, women and children attended the dawn prayer marking the end of the fasting month in the Rabaa al-Adawiya and Al-Nahda squares, where Morsi supporters have been camped for weeks.
The army-installed government vowed on Wednesday to remove the protest camps, saying it had refrained from doing so out of "solicitude for the holy month of Ramadan".
But leaders of the Muslim Brotherhood from which Morsi hails called for rallies "until victory", raising fears of further bloody confrontations.
Warning of the looming showdown, government daily Al-Gumhuriya on Thursday ran the headlines "Final warning" and "The hour of battle approaches".
At the Rabaa al-Adawiya sit-in, families celebrated Eid in defiance of the looming crackdown.
Delighted children applauded as dancers wearing Sponge Bob and Barney the Dinosaur costumes hopped around the stage.
"We came to celebrate Eid with our parents, who are here day and night," said Manar, a teenage girl.
Several thousand Morsi supporters also marched elsewhere, including in Egypt's second city Alexandria and in Qena in the south.
The warning to the protesters came after the interim presidency said on Wednesday that Western and Arab efforts to mediate an end to the political deadlock had failed.
US Deputy Secretary of State William Burns left Cairo on Tuesday without making headway in finding a compromise.
"These efforts have not achieved the hoped for results," the presidency said, referring to mediation by Burns and EU envoy Bernardino Leon, who were among a string of diplomats who had travelled to Cairo.
The presidency said it "holds the Muslim Brotherhood completely responsible for the failure of these efforts, and for consequent events and developments relating to violations of the law and endangering public safety".
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Egypt is deeply divided over Morsi's ouster.
Violence on the sidelines of demonstrations between his supporters and opponents has killed more than 250 people -- mostly Morsi's backers -- since the end of June.
The government had already ordered police to end the sit-ins and protests, which it described as a "national security threat," but held off amid the diplomatic push to broker a peaceful resolution.
UN chief Ban Ki-moon urged the release of Morsi, who has been formally remanded in custody and is being held incommunicado at an undisclosed location.
Washington on Wednesday urged Egypt's military and political factions to resolve their differences through dialogue.
"We absolutely do not believe that the time for dialogue has passed. We will continue this conversation, and it certainly remains a priority of ours and obviously a priority of the EU and other officials around the world who've been involved," State Department spokeswoman Jen Psaki said.
Western envoys had pressured the Brotherhood to end its sit-ins, according to Islamists who attended the talks. They also demanded that the government release jailed Islamist leaders as a confidence-building measure.
Morsi himself is being held on suspicion of having collaborated with Palestinian militants to kill policemen and stage jail breaks during the 2011 uprising against strongman Hosni Mubarak, while Morsi was in prison.
The Brotherhood's supreme guide, Mohamed Badie, and his deputies are to stand trial later this month on charges of inciting the shootings of protesters outside their headquarters on June 30.
The Islamists say a prisoner release is a precondition for further talks on finding a settlement, which could include symbolically reinstating Morsi, who would then call early elections.
However, the government says it is up to the judiciary to release prisoners.
Authorities have promised demonstrators a safe exit and said ending their protests would allow the Brotherhood to return to political life.
More than 80 protesters were killed in clashes with police at the main sit-in outside Cairo's Rabaa al-Adawiya mosque on June 27.
And upwards of 50 people died in earlier clashes outside an elite army base.