One person died in fresh clashes on Saturday, as the rift between Egypt's military rulers and activists who ousted Hosni Mubarak deepened just days before landmark polls.
The naming of a new prime minister, Kamal al-Ganzuri who once served as premier under Mubarak, failed to satisfy demands for change ahead of parliamentary elections due to start on Monday.
A 19-year-old demonstrator was fatally injured when he was hit by a police truck at a protest against Ganzuri's appointment in front of the cabinet headquarters.
The victim died of massive internal bleeding from multiple fractures to the pelvis, possibly caused by a heavy vehicle, a medic told AFP.
Witnesses said that a police van had charged into the demonstrators.
An interior ministry statement confirmed the death, but said its forces had not been sent to clear the protesters.
The ministry said trucks taking police officers back to the ministry at the end of their shifts drove past demonstrators, who thought they were there to clear the protest.
"We explained the situation and the demonstrators understood, but others began throwing molotov cocktails at us and chaos ensued," it said.
The trucks decided to back up to avoid further clashes, hitting protester Ahmed Surur, the ministry said, expressing its "deepest sorrow and apologies."
In nearby Tahrir Square -- the symbolic heart of the protests that toppled Mubarak -- thousands spent the night, vowing to stay until their demand of civilian rule is met.
Dozens of tents have been pitched, a rubbish collection station set up and street vendors roam the square in signs that protesters are settling in for the long haul.
On Friday, Ganzuri -- who served as Mubarak's prime minister between 1996 and 1999 -- assured Egyptians that the military had given him more powers than past cabinets, in a bid to placate protesters who accuse the Supreme Council of the Armed Forces (SCAF) of trying to retain control.
"Previous cabinets over the past 60 years were given many powers by the president of the republic," Ganzuri told reporters in his first public statement after his appointment.
In a later television address, Ganzuri said he would formalise his government "before the end of next week" and would allocate some portfolios to younger people.
But protesters in the square quickly rejected his appointment, saying he was not the man to lead a transition to democracy.
"We do not want someone who has been selected by the military council, we want a civilian who was with us in Tahrir during the revolution, someone who has the confidence of the people," said one protester, Omar Abdel Mansur.
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Hundreds of demonstrators in the square had branched off to the nearby cabinet offices to block Ganzuri from entering the building, chanting "revolution" and "Ganzuri is a former regime leftover."
The protesters proposed a list of presidential candidates to form a civilian leadership council, including former UN nuclear watchdog chief Mohamed ElBaradei, a prominent dissident during Mubarak's rule.
They were bolstered earlier by an announcement that the grand imam of Al-Azhar, Sunni Islam's highest authority, had thrown his weight behind them.
"The grand imam (Sheikh Ahmed al-Tayyeb) backs you and is praying for your victory," senior aide Hassan Shafie told them during a visit to the square, focus of huge protests first against Mubarak and now the army.
Sheikh Mazhar Shahin, an imam who led tens of thousands of worshippers in prayer at the square on Friday, said the protesters would stay until their demands were met.
He called for a national salvation government with presidential powers.
ElBaradei joined the protesters in the square on Friday.
But the Tahrir protest was countered by a rival demonstration in a square about three kilometres (two miles) away, where more than 10,000 people gathered to show support for the military chanting "Down with Tahrir."
"I joined the protests against the former regime," said one of the protesters, Mohammed Abdelhamid. "But the people in Tahrir today don't represent all Egyptians."
The rallies came just days before the first parliamentary elections since Mubarak's ouster in February, which left the military in charge.
The SCAF has said repeatedly that it does not have political ambitions and plans to hand power to an elected civilian authority after presidential elections set to take place no later than the end of June 2012.
But it has also insisted it will not bow to pressure from the protesters in Tahrir, saying they do not represent the whole country.
Washington, a close ally of Egypt, called for a quick transfer to civilian rule.
"The United States strongly believes that the new Egyptian government must be empowered with real authority immediately," White House press secretary Jay Carney said in a statement.
UN chief Ban Ki-moon renewed calls for the military rulers to ensure a "peaceful transition" after talks by telephone with Field Marshal Hussein Tantawi, the head of Egypt's military council.
EU foreign policy chief Catherine Ashton called for an end to the violence saying "the rule of law has to be maintained."
At least 42 people have died and more than 3,000 been injured since Saturday when clashes began.