At least 12 people died Saturday night in sectarian fighting provoked by an anti-Christian demonstration outside the Coptic Saint Mena Church in Imbaba, a Cairo suburb. Some 240 people were wounded, including at least 65 who were shot.

Several hundred Copts held an overnight sit-in Sunday to demand that the head of the ruling Military Council, Mohamed Hussein Tantawi, resign, and that those behind the attacks be brought to justice. On Monday, more than 1,000 Copts demonstrated in front of the state TV building in central Cairo.

There are conflicting reports as to who started the shooting, with some claiming it was a local trader and others contending it was a rooftop sniper. The demonstration was dominated by Salafist Muslims, but men in Western clothes who are usually described only as “thugs” were also in the crowd.

Saturday night’s clashes lasted for nearly 12 hours without any intervention by the police. Two churches, cars and buildings went up in flames, and shops and apartments were ransacked. It was only after apartment buildings were set on fire in the early hours of Sunday morning that hundreds of heavily armed soldiers and riot police stepped in with tear gas to quell the clashes and disperse the crowds. The troops took control of the poverty-stricken and garbage-strewn slum, arrested 190 people, and imposed a curfew in the area around the Saint Mena Church.

The Copts blamed the government and soldiers for failing to protect them, and, together with Muslim residents, called on Mansour Essawy, the interior minister, to improve security on the streets.

On Sunday afternoon, when a march for national unity assembled in front of the High Court in the centre of Cairo, the participants were pelted with stones by dozens of men from a nearby neighbourhood, provoking clashes. Scores of people were injured in the fighting, but soldiers did nothing to stop the violence.

Justice Minister Abdel Aziz al-Gindi, speaking after an emergency cabinet meeting, said, “Egypt has already become a nation in danger.” The government would strike “with an iron hand” to preserve national security, he declared.

Gindi went on to say that the government would “immediately and firmly implement the laws that criminalise attacks against places of worship and freedom of belief.” These laws carry the death penalty. Gindi added that the Egyptian people, police and army were “standing together to foil the counter-revolution.”

An army spokesman said those arrested would face the Supreme Military Court. He too warned of “severe dangers facing Egypt during this phase.”

The threat to use an “iron hand” against the “counter-revolution” is ominous. The military identifies preserving its own rule with the “revolution” and will use the incidents to portray itself as the guardian of public order.

The Imbaba incident is the latest in a series of sectarian attacks on the increasingly marginalised and impoverished Coptic Christian community, which makes up 10 percent of Egypt’s population.

As with most of the incidents of sectarian strife in the last three years, the clash started after baseless rumours, in this case involving a former Muslim who, having married a Christian and converted to Christianity, was supposedly now being held against her will in the Church of St. Mena.

The anti-Copt demonstration came in the wake of a 10,000-strong Salafist protest outside the cathedral in Cairo on April 29, organized on the basis of a similar rumour.

When last Saturday the Copts received warnings that a group of Salafis were approaching the St. Mena Church, they rushed to defend it, armed with makeshift weapons. Within a short time, crowds of Christians and Muslims—up to 2,000 according to police reports—gathered and fighting broke out.

Given the degree of unity between Muslims and Copts during the movement earlier this year against ex-President Hosni Mubarak’s rule, sentiment that is still extant, there is widespread discussion over who is responsible for reigniting sectarian tensions. The Muslim Brotherhood has opposed the attacks on the Copts. It called a unity march with other religious forces attended by 50,000 people, including Salafists, some of whose leaders also denounced the attack in Imbaba.

Many have alleged that the inaction of the police indicates that the new government instigated the anti-Copt attack, continuing Mubarak’s policy of fostering Islamism to divide the working class.

The Salafists are ultra-conservative Muslims who seek to establish an Islamic state by means of Jihadist methods. Their increased activity is also attributed to Saudi Arabia, believed to be using its Wahhabi proxies in Egypt to strengthen its position there and oppose Cairo’s rapprochement with Tehran.

The Salafist attacks serve to divert social and political discontent away from the regime and its failure to alleviate the suffering of the masses and channel it in a reactionary direction. They provide the military government, in the face of ongoing unrest, with a mechanism for dividing the Egyptian people and a pretext for clamping down more severely on opposition to the regime.

While the revolutionary movement swept Mubarak from power, the dictatorship remains in force under a US-backed military junta. Responsibility for the military’s ability to retain power rests, in the first instance, with the uncritical support given to the generals by bourgeois opposition figures such as Mohammed ElBaradei and the Muslim Brotherhood during the mass uprising and in its aftermath. They have sought to lend credibility to the worthless democratic pledges of the new government, which is no less determined than Mubarak to suppress the revolutionary struggles that have shaken Egypt for the past four months.

The Military Council is rapidly losing popular support and credibility, despite having detained some of the leading figures of the old regime, including Mubarak and his sons, in order to defuse the anger of the Egyptian people.

Faced with ongoing strikes for improved wages and job security, and protests calling for social and democratic reforms, the military rulers have turned to increasingly repressive measures. Using the emergency legislation in place since the assassination of Anwar Sadat 30 years ago, the regime has banned all protests and strikes and imposed severe punishments on those demonstrating in opposition to the regime.

It has forcibly dispersed strikers and their supporters, used lethal force to drive protesters from Tahrir Square and arrested tens of thousands of demonstrators and oppositionists, some of whom have been tortured.

With Egypt’s economy in freefall, the situation facing working people is becoming intolerable. There has been a massive hike in the cost of basic commodities under conditions where more than half the population lives on less than $2 a day.

Egypt's credit-worthiness has collapsed, making it impossible to finance food imports. The country has only one month's supply of rice and four months’ supply of wheat.

According to Reuters, Egypt’s foreign exchange reserves fell by $13 billion, about one third, during the first three months of the year, leaving only $24.5 billion at the end of April. Tourism has evaporated and remittances from abroad are down by half, due to the expulsion of Egyptian workers from Libya. With Egypt needing $25 billion a year to finance its trade deficit, it has sufficient reserves to last only until September.

The budget deficit for 2010-2011 is expected to be about 9.3 percent of GDP. Cairo is urgently seeking $10 billion in loans and aid from international financial institutions.