The Muslim Brotherhood called on Egyptians to rise up against those who "want to steal" the revolution, a statement by its political wing said on Monday, after Egyptian state television said 42 people were killed in shooting outside the Cairo headquarters of the Republican Guard.
The Brotherhood's official spokesman, Gehad El-Haddad said shooting broke out in the early morning while Islamists were praying and staging a peaceful sit-in outside the Republican Guard barracks where Morsi is believed to be held.
The military claimed "a terrorist group" tried to storm the Republican Guard compound and one army officer had been killed and 40 wounded. Soldiers returned fire when they were attacked by armed assailants, a military source said.
The bloodshed deepened Egypt's political crisis, escalating the struggle between the army, which overthrew Morsi last Wednesday after mass demonstrations demanding his resignation, and the Brotherhood, which has denounced what it called a coup.
A statement on the Brotherhood's Facebook page following the shooting said, "(The Freedom and Justice Party) calls on the great Egyptian people to rise up against those who want to steal their revolution with tanks and armored vehicles, even over the dead bodies of the people,"
Following the shooting, the ultra-conservative Islamist Nour party, which initially supported the military intervention, said it was withdrawing from stalled negotiations to form an interim government for the transition to fresh elections.
Al Jazeera's Egypt news channel broadcast footage of what appeared to be five men killed in the violence, and medics applying cardiopulmonary resuscitation to an unconscious man at a makeshift clinic at a nearby pro-Morsi sit-in.
A Reuters television producer at the scene saw first aid helpers attempting mouth-to-mouth resuscitation on a dying man. Wounded people were being ferried to the field hospital on motorbikes, given first aid treatment and taken away in ambulances.
The military overthrew Morsi on Wednesday after mass nationwide demonstrations led by youth activists demanding his resignation. The Brotherhood denounced the intervention as a coup and vowed peaceful resistance.
Military vehicles sealed off traffic in a wide area around the Rabaa Adawia mosque where Morsi supporters led by senior Brotherhood leaders have been staging protests since his ouster.
The army also closed two of the main bridges across the Nile River with armored vehicles, witnesses said.
Talks on forming a new government were already in trouble before Monday's shooting, after the Nour party rejected two liberal-minded candidates for prime minister proposed by interim head of state Adli Mansour.
Nour, Egypt's second biggest Islamist party, which is vital to give the new authorities a veneer of Islamist backing, said it had withdrawn from the negotiations in protest at what it called the "massacre at the Republican Guard (compound)".
"We've announced our withdrawal from all tracks of negotiations as a first response," party spokesman Nader Bakar said on Facebook.