* Mursi acts after Sinai border killings
* Retiring generals Tantawi, Enan become advisers
* Tantawi had been Mubarak's defence minister for 20 years
By Edmund Blair
CAIRO, Aug 13 Egypt's Islamist President Mohamed
Mursi dismissed Cairo's two top generals and quashed a military
order that had curbed the new leader's powers, in a move that
further stamped his authority on the country and its army.
There had been much debate over the fate of Field Marshal
Hussein Tantawi, 76, who until Mursi's election in June had
ruled Egypt as head of a military council since Hosni Mubarak
was toppled last year. The timing of Sunday's announcement to
replace him as armed forces head was nevertheless a surprise.
However, an embarrassing debacle for the army on the border
with Israel, where 16 Egyptian troops were killed by Islamist
militants a week ago, may have given Mursi the opening he needed
to step up the pace in rolling back the military's influence,
pushing aside Tantawi and military chief of staff Sami Enan.
Mursi's spokesman called it a "sovereign" decision by the
head of state, and aimed at "pumping new blood" into an army
that has shown signs of hoping to control the novice president.
A fellow Islamist said Egypt could not go on having "two heads".
Secular activists, wary of political Islam, nonetheless
welcomed a "first step toward establishing a civilian state".
Mursi himself later said: "The decisions I took today were
not meant ever to target certain persons, nor did I intend to
embarrass institutions, nor was my aim to narrow freedoms.
"I did not mean to send a negative message about anyone, but
my aim was the benefit of this nation and its people," he said,
praising the work of the armed forces and saying his decision
would free them to focus on their professional tasks.
The move sidelines Tantawi, Mubarak's defence minister for
two decades and whose continued presence had cast a shadow of
military rule over the new democracy, and whittles away powers
still held by the army, from whose ranks all Egyptian presidents
for the past 60 years had been drawn until the voting in June.
A member of the military council told Reuters that Mursi, a
moderate Islamist party official popularly elected in June but
with constitutional powers sharply circumscribed in advance by
the generals, had consulted Tantawi and General Enan, 64, before
ordering both men to retire.
But it was not clear how far the generals, members of the
Supreme Council of the Armed Forces (SCAF), actually consented
to a move that reveals a reordering of Egypt's political forces
as they all wait for a new constitution, shifting more powers
towards Mursi and his long-suppressed Muslim Brotherhood.
"This clash between the new president and the military
council was expected - but not this fast," said analyst Gamal
Soltan. "It can be considered a restructuring of the armed
forces and an end to the role of SCAF in political life."
Thousands of Islamist supporters gathered in Cairo's Tahrir
Square and other cities to back Mursi's decision. "President of
the republic, your decree gets 100 percent," some chanted.
Tantawi, after serving Mubarak as a minister for 20 years,
helped ease the ageing dictator out of office on Feb. 11, 2011
in the face of the mass street protests of the Arab Spring.
A senior Brotherhood official, Mahmoud Ghozlan, said the
army should have returned to barracks once Mursi was elected.
But it had instead sought to retain a role in politics: "The
nation came to have two heads - the president and the military
council," Ghozlan said. "The president had to act to recover his
full powers from the hands of the military council."
In a statement that came out of the blue, presidential
spokesman Yasser Ali announced: "Field Marshal Hussein Tantawi
has been transferred into retirement from today." In his place
as armed forces chief and defence minister, Mursi appointed
General Abdel Fattah al-Sisi, 57, from military intelligence.
Enan was replaced General Sidki Sobhi, 56, who headed the
Third Field Army based in Suez, on the border with Sinai.
Both those pushed into retirement, whose positions may have
been weakened by the border debacle last week in the Sinai
desert, were appointed as advisers to the president.
By scrapping the army's constitutional declaration, Mursi
can also take on the legislative powers the generals had sought
to keep for themselves in the absence of a parliament. In June,
the military council, backed by judges, dissolved the
Islamist-led assembly elected in January - a move Mursi has
"The decision was a sovereign one, taken by the president to
pump new blood into the military establishment in the interests
of developing a new, modern state," presidential spokesman Ali
told Reuters after making the announcement.
"It was a critical decision and the members of the military
council understood this because they are patriotic and General
Sisi is from the new generation of the patriotic men of the
armed forces. He is responsible and well respected."
Enan was long seen as particularly close to the Pentagon,
the main sponsor of Egypt's armed forces. Washington gives Egypt
$1.3 billion in military aid each year.
Liberals and other political rivals of the Brotherhood have
voiced concerns at the growing might of the Islamists, who for
decades were hounded and jailed by Mubarak and his predecessors.
But they have also been wary of the army's continuing role.
The April 6 youth movement, which helped galvanise the
revolt against Mubarak, described Mursi's move as the "first
step towards establishing a civilian state", it said on its
Facebook page. "We want a strong, national army to protect the
nation and that does not intervene in politics".
Tantawi's age had meant that his departure had been long
expected in some form, and his appointment as an adviser to
Mursi appeared to exclude the possibility he might face the kind
of prosecution that saw Mubarak, now 84, jailed for life.
In a similar vein, two other senior officers in the navy and
air defence retired into high office at the Suez Canal Authority
and an industrial body, mirroring the kind of lucrative sinecure
posts offered to officers in Mubarak's era.
The armed forces, with vast resources in Egypt's economy as
well as a military strength funded in part by Washington, remain
a key institution in Egypt and the process of establishing full
democratic control has only just begun.
General Mohamed el-Assar, who sits on the military council,
told Reuters: "The decision was based on consultation with the
field marshal, and the rest of the military council."
Mursi, whose election victory over a former general prompted
concerns in Israel and the West about alliances with Egypt, also
appointed a judge, Mahmoud Mekky, as his vice president. Mekky
is a brother of newly appointed Justice Minister Ahmed Mekky,
who had been a vocal critic of vote-rigging under Mubarak.
Mekky and Sisi were shortly afterwards shown on state
television with Mursi, being sworn in to their new positions.
Mursi, who has pledged to uphold democratic accountability
and to stand by Cairo's treaties with Israel and other states,
has shown impatience with the military following violence in the
Sinai desert that brought trouble with Israel and the
Palestinians' Gaza Strip enclave this month.
The president, whose own Brotherhood movement renounced
violence to achieve political change in Egypt long ago, sacked
Egypt's intelligence chief last week after the attack in which
Islamist militants killed the 16 Egyptian border guards before
trying to storm the Israeli border.
"The timing of the sacking of Tantawi will serve President
Mursi as many Egyptians had blamed the military for the events
(on the border) and would not stand against this decision," said
Mustapha Al Sayyid.
One analyst said Mursi may also have acted to ensure the
military commanders did not recoup their lost credit after a
military operation launched in Sinai to hunt down the militants,
the biggest such operation since Egypt's 1973 war with Israel.
On Sunday, officials said Egyptian troops had killed five
Islamist militants after storming their hideout near the
isolated border with Israel.