Supporters of Egyptian President Mohamed Morsi chant slogans during a demonstration in Cairo. -AP Photo

CAIRO: Thousands of protesters breached a barricade outside the Egyptian presidential palace in Cairo on Tuesday, as even more supporters of President Mohamed Morsi massed just a few kilometres (miles) away.

There were fears the rival rallies could mix, sparking clashes like those seen outside the palace last week, when seven people were killed and hundreds injured in a melee between mobs wielding metal bars, petrol bombs and handguns.

Troops have orders from the president to use police powers to protect “vital state institutions”.

Morsi is determined to press ahead with a referendum next Saturday on a controversial draft constitution drawn up by a panel dominated by his Islamic allies and bitterly opposed by his mainly secular opponents.

There was no immediate violent confrontation as anti-Morsi protesters pulled apart a high metal gate and toppled concrete blocks, forcing hundreds of soldiers to pull back closer to the walled presidential palace compound where six tanks were stationed.

At the counter-demonstration, the huge crowd held up banners saying: “Yes to the constitution,” and waved Saudi and black Islamic flags as well as the national emblem.

“There's a war against religion,” said one participant, Mohamed Shehata.

“We must vote yes for the referendum as it is the best written constitution in our history,” said Ahmed Youssef, a council member of the fundamentalist Gamaa Islamiya party.

Many of the pro-referendum demonstrators were bussed in from the provinces, AFP correspondents reported.

The military has vowed to carry out its duty to maintain stability within democratic rules.

Defence Minister General Abel-Fattah al-Sisi has ordered army officers to exercise the “highest levels of self-restraint” as they protect Egyptian stability “regardless of pressures and challenges”.

But political analyst Emad Gad said there was a chance the crisis might prompt the army to step in and maybe even seize back the political control they gave up on Morsi's June election.

“In the event there are violent clashes or especially if blood is spilt in the street, the army will certainly intervene,” he said.

The opposition, made up of secular, leftwing and liberal groups, sees the draft constitution rushed through by an Islamic-dominated panel last month as weakening human rights, the rights of women and religious minorities.

The UN human rights chief and international watchdogs have criticised the draft and the way it was drawn up.

Morsi's supporters, however, argue that it is up to Egypt's voters to decide in the referendum, and the country will have to abide by the result.

Michael Wahid Hanna, a political analyst at US thinktank The Century Foundation told AFP that, as things stood, there was a good chance of the referendum passing.

He cautioned, though, that “I don't take it as an absolute certainty, as there is more fluidity in the Egypt electorate than we give it credit for.”

If the draft charter were adopted, Hanna warned, “I fear they are going to have an institutionalised crisis” that would polarise Egypt in the long term, raising “the spectre of violence”.

The United States, which gives billions of dollars in aid to Egypt's military, has called for the protests over the referendum to remain peaceful.

The prolonged crisis, the worst since a revolution early last year that overthrew autocratic president Hosni Mubarak, has intensified uncertainty over Egypt's economy.

The International Monetary Fund on Tuesday put a proposed $4.8 billion loan on hold.

Egyptian Prime Minister Hisham Qandil said: “We have officially requested the delay of a month in the negotiations with the IMF because of the political situation in the country.”

The IMF's executive board had been expected this month to review a provisional agreement on the loan, which aims to bridge financing shortfalls through fiscal 2013-2014 as the country rebuilds its battered post-revolution economy.