SARAH EL DEEB
CAIRO (AP) -- Egypt's interim president on Thursday extended a nationwide state of emergency for two more months, citing continued security concerns, as a senior Egyptian official warned of more terrorist attacks in the wake of a failed assassination attempt against the interior minister and suicide bombings in the Sinai Peninsula.
The nearly month-old state of emergency, which is due to expire within days, preserves greater powers for security forces amid a crackdown on supporters of ousted President Mohammed Morsi and increasing violence by Islamic militants. It was first declared in mid-August after authorities cleared two protest encampments held by Morsi supporters, unleashing violence that claimed the lives of nearly 1,000 in subsequent days.
Ever since, a nighttime curfew has also been in effect in much of the country. The interim government will decide separately on whether to continue the curfew. Interim Prime Minister Hazem el-Beblawi has said the curfew, now lasting for 7 hours most nights, would likely be eased.
The government Thursday announced new measures aimed at easing an economic crunch, in a sign it aims to show that it is tackling the nation's problems even amid the exceptional security conditions.
The measures included relief for low-income families from school expenditures and reduction in public transportation costs. They also included an injection of $ 3.1 billion budget support to be spent on infrastructure projects and employment generation, which the government says it hopes will increase economic growth from the current 2 percent to 3.5 percent.
The spending will largely be financed from money pledged by Gulf countries to Egypt after Morsi's July 3 ouster, the government said.
Egypt's continued political instability has badly hit the country's economy, decimating tourism and direct foreign investment. In recent rallies, Morsi supporters have increasingly sought to find public backing by evoking the hard economic conditions and authorities' failure to improve people's daily lives.
The extension of the state of emergency, which allows police wider powers of arrest, had been expected. The decree cited continued security concerns. Under the interim constitution, the state of emergency can only be imposed for three months, then must be put to a public referendum.
For most of the 30-year rule of Morsi's predecessor, Hosni Mubarak, Egypt was under emergency law, lifted only after Mubarak's ouster.
The extension came days after the Egyptian military launched a major offensive in northern region of Sinai, with troops backed by helicopter gunships raiding suspected hideouts al-Qaida inspired militants in a dozen villages. The three-day offensive left 29 militants dead, demolished houses and led to the seizure of weapons and explosives, including 10 anti-aircraft missiles, according to military officials.
In what appeared to be a backlash, a pair of suicide bombers hit military targets in Sinai, killing nine soldiers. Last week, a car bombing in Cairo believed to have been by a suicide attacker -- targeted the convoy of Interior Minister Mohammed Ibrahim, who is in charge of the police. Ibrahim escaped unharmed but a civilian was killed, in the first such political assassination attempt since Morsi's July 3 ouster.
A senior Egyptian official said Thursday that authorities have foiled several "big terrorist attacks" recently. He said authorities expect more assassination attempts like the one on Ibrahim. He said there is an estimated 10,000 militants operating in Sinai, some of them former prisoners whom Morsi granted amnesty during his year in office.
The official spoke on condition of anonymity because he was not authorized to talk to the press.
Authorities have been cracking down on Morsi's Muslim Brotherhood and other Islamists since his ouster, arresting at least 2,000 the past month. Senior leaders of the group have been charged or are under investigation on a string of allegations, particularly incitement to violence. At the same time, extremists' attacks on police stations, government offices and churches have grown more brazen in south Egypt.
Talk of reconciliation has largely faded. Indicating that the presidency is not concerned about negotiating with the Muslim Brotherhood, the official said that the presidency is only acting as "shepherd" to political factions which should be the ones holding talks with Islamists.
"We are not in direct talks with Muslim Brotherhood," he stressed.
The Muslim Brotherhood and its allies have stuck by their demand that Morsi be reinstated as president. Morsi has been in detention in an undisclosed location and now faces several charges including inciting the killing of protesters last year.
Also Thursday, an Egyptian court acquitted 10 policemen and four civilians charged in the killings of several protesters who were among the first to fall in the 2011 uprising against Mubarak.