CAIRO (Reuters) - Egypt's former leader Hosni Mubarak could soon be freed from jail, giving a new jolt to a nation in turmoil, after a court ruled on Monday that he could no longer be held in custody on a corruption charge.
His lawyer said he could be released within days, six weeks after the armed forces Mubarak once commanded deposed his elected Islamist successor to spark the bloodiest internal conflict in the modern history of the most populous Arab state.
The army detained President Mohamed Mursi on July 3 after huge protests against him. It has since cracked down on his Muslim Brotherhood. Among hundreds of casualties, dozens of security personnel have died, including 24 policemen killed by suspected Islamists near the border with Israel on Monday.
At 85, Mubarak may have no political future but his release could stir emotions and raise new questions on whether the popular uprising that ended his 30-year rule in February 2011 is leading back simply to a new form of military-backed government.
Arrested two years ago as talk of democracy swept the Arab world, the former strongman appeared in a courtroom cage at a trial in which he was convicted of complicity in the murder of protesters. In January, Egypt's highest court ordered a retrial.
After Monday's court ruling, the only legal grounds for Mubarak's continued detention rest on another corruption case which his lawyer, Fareed el-Deeb, said would be settled swiftly.
"All we have left is a simple administrative procedure that should take no more than 48 hours. He should be freed by the end of the week," Deeb told Reuters.
Without confirming that Mubarak would be released, a judicial source said he would spend another two weeks behind bars before a court ruling on the outstanding case against him.
The former leader is being held at Tora prison on the southern outskirts of Cairo, which also hosts senior Brotherhood members detained in a clampdown that followed Mursi's ouster.
Mubarak's eventual release could generate more political tension in Egypt, where almost 900 people, including nearly 100 soldiers and police, have been killed since the authorities forcibly dispersed Brotherhood sit-ins in Cairo on Wednesday.
DEADLY SINAI ATTACK
In the Sinai peninsula, where attacks on security forces have multiplied since Mursi's removal, suspected Islamist militants killed at least 24 policemen on Monday.
Three policemen were also wounded in the grenade and machinegun attack near the north Sinai town of Rafah on the border with Israel, medical and security sources said.
Photos circulated on social media and purporting to show the aftermath of the attack showed victims lying with their hands tied behind them, apparently shot execution-style. They were not in uniform. The photos could not be immediately verified.
A sniper also shot dead a policeman in the Sinai city of El Arish, the state news agency said, quoting a security source.
Mounting insecurity in Sinai worries Egypt and also the United States because the desert peninsula lies next to Israel and the Palestinians' Hamas-ruled Gaza Strip, as well as the Suez Canal, one of the world's most important shipping arteries.
The attacks underlined the challenges facing Egypt's new rulers, who portray their campaign as combating terrorism.
The Brotherhood renounced violence decades ago, denies any links with armed militants, including those in Sinai who have gained strength since Mubarak's overthrow, and disavows attacks on churches that have proliferated in the past week.
Pressing an official drive against the Islamist movement, a prosecutor ordered that Mursi, held in an undisclosed location since his removal, should be detained for another 15 days in a new case of inciting violence, the state news agency MENA said.
The Brotherhood itself has responded with outrage after 37 Islamists died in government custody on Sunday in an incident it described as "murder". The authorities said the men died of tear gas suffocation during a thwarted jailbreak.
"The murders show the violations and abuses that political detainees who oppose the July 3 coup get subjected to," said the Brotherhood, which has called for an independent, non-Egyptian investigation into the incident.
Egypt's upheaval is causing global jitters, but no consensus on how to respond has emerged in the West or the Arab world.
European Union foreign ministers will hold an emergency meeting in Brussels on Wednesday to discuss how to force Egypt's army-backed government into seeking a peaceful compromise.
Options likely to be discussed include cutbacks in Europe's 5-billion euro package of grants and loans promised last year, as well as a possible arms embargo against Egypt, said EU envoy Bernardino Leon.
"No options are being ruled out," he told reporters.
The United States, an ally of Egypt since it made peace with Israel in 1979, has postponed delivery of four F-16 fighters and scrapped a joint military exercise, but has not halted its $1.55 billion in annual aid, spent mostly on U.S.-made arms supplies.
There are increasing calls from U.S. lawmakers for the aid to be suspended. "For us to sit by and watch this happen is a violation of everything that we stood for," Senator John McCain, a former Republican presidential nominee, said.
But Saudi Arabia, another U.S. ally, pledged to fill any financial gaps left by Western countries withdrawing aid from Egypt over the army crackdown.
"To those who have declared they are stopping aid to Egypt or are waving such a threat, the Arab and Muslim nations are wealthy with their people and resources and will not shy away from offering a helping hand to Egypt," Saudi Foreign Minister Prince Saud al-Faisal said.
Saudi Arabia and other Gulf Arab monarchies, apart from Qatar, have long mistrusted the Brotherhood's political ambitions.
Israel is also prodding the West to stick by Egypt's army, citing the need for stability. "Like it or not, the army is the only player that can restore law and order," a senior Israeli official said on Monday.
Egypt has made clear it will reject any attempts to use aid flows as a lever.
(Additional reporting by Lin Noueihed, Tom Perry and Shadia Nasralla in Cairo and Alex Dziadosz in Minya; Editing by Alastair Macdonald)
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