By Alistair Lyon and Tom Perry
CAIRO (Reuters) - Protesters rallied again in Cairo on Sunday to try to evict Egypt's ruling generals, in a trial of strength that has muddied the run-up to Egypt's first vote since a popular revolt deposed former leader Hosni Mubarak.
The parliamentary election that gets under way on Monday and Tuesday is the first step in a transfer to civilian rule, promised by the ruling army council that replaced Mubarak.
The course of transformation in Egypt, the Arab world's most populous nation, will reverberate across a region where a new generation demanding democratic change has risen up against autocratic governments that have ruled for decades.
Some Egyptians yearn for stability after a week of bloodshed that has killed 42 people and wounded more than 2,000, preferring for now to let the generals run a nation whose prolonged political turmoil has thrust the economy deeper into crisis.
But the demonstrators gathered in Cairo's Tahrir Square want the council to make way for a civilian interim administration immediately. They reject its promise to complete the handover by July and its choice of 78-year-old Kamal Ganzouri to form the next cabinet.
Activists had called for a mass rally to pile pressure on the generals, and by mid-afternoon there were thousands in the square, hub of the unrest that toppled Mubarak.
Field Marshal Mohamed Hussein Tantawi, head of the council, said the army would ensure security at the polling booths.
"We are at a crossroads. There are only two routes, the success of elections leading Egypt toward safety or facing dangerous hurdles that we in the armed forces, as part of the Egyptian people, will not allow," he declared.
Abdel Moneim Aboul Futuh, an Islamist presidential candidate who opposes military rule, said: "The nation is larger than Field Marshal Tantawi and Lieutenant General Sami Enan and the military council. A government with revolutionary leadership must be formed to meet the demands of Tahrir Square."
State television quoted Tantawi as saying the army's role in the new constitution would be unchanged: to protect the nation.
The outgoing cabinet angered many Egyptians by floating proposals that would have given the army sweeping national security powers and protected it from civilian scrutiny.
The generals have received tacit support from Islamist parties eager that nothing should disrupt voting in the first of three rounds of an election in which they expect to do well.
In what appeared to be a gesture to the protesters, the ruling generals agreed to the formation of "a civilian consultative council" that would work with the military and the government to run the country.
The move fell short of the protesters' demand for the generals to hand all power to a civilian council.
Bassam Sharaf, among protesters outside parliament, said the objection to Ganzouri was not his age, but the policies he pursued as prime minister under Mubarak from 1996 to 1999.
"Two-thirds of the ministers that Ganzouri appointed in his day are now in Tora prison," he said, referring to Mubarak-era officials accused of corruption and other offences who were put on trial after an uprising swept Mubarak from power in February.
Alarmed by Egypt's latest bout of unrest, the United States and the European Union have condemned the "excessive force" used by the authorities and urged a swift handover to civilian rule.
Some protesters favor Mohamed ElBaradei, former head of the U.N. nuclear watchdog, who has offered to drop his campaign for the presidency and to lead a government of national unity.
ElBaradei is respected among pro-democracy campaigners and has a high international profile, but many Egyptians view him as out of touch because he spent much of his career abroad.
Mohamed Badie, leader of the once-banned Muslim Brotherhood, which hopes the election will catapult it into a strong place in mainstream politics, offered Ganzouri qualified support, depending on the powers and makeup of his cabinet.
He said conspirators were behind the unrest. "There are powers inside and outside Egypt that don't want stability for Egypt or development, and this is something that is being pushed and paid for," he said late on Saturday.
Al-Gama'a al-Islamiya group, which has now renounced violence but led an armed insurgency against Mubarak during Ganzouri's government in the 1990s, said it would not join the protesters in Tahrir, criticizing them for trying to "force a certain prime minister on Egypt," a reference to ElBaradei.
The Salafi Islamist Nour Party said it would meet Ganzouri in the next few days to propose names for his cabinet.
Protesters appear split over the election. Some do not trust the military to ensure a free vote. Others say the poll should not be a casualty of the campaign against military rule.
"This is one thing, that is something else. Everyone will be in the polling stations come Monday," said Abdul Aal Diab, a 46-year-old state employee protesting in Tahrir.
"Why are you so sure?" interrupted Mustafa Essam, 27. "I won't go. I have no faith in anyone."
Groups chanted slogans against the generals in Tahrir as people wandered among banners, tents and tea stalls with chairs and tables that lent the protest an air of permanence.
The complex, drawn-out election to parliament's lower house concludes in early January. Voting for the upper house and the presidency will follow before the end of June. A confusing array of candidates and parties, and fears of bullying, bribery and violence at polling stations set voters a daunting challenge.
The British government urged the Egyptian authorities to make sure the elections were fair, credible and free from violence.
"What happens in Egypt will be crucial for the whole region and the world will be watching closely in the days and months ahead," British Foreign Secretary William Hague said.
Ahmed Abdul Fattah, 40, said he would vote for the moderate Islamist Wasat Party, but with no enthusiasm for what he said were poorly timed elections. "Why should we have them? So the Muslim Brotherhood can dominate us?" he asked.
(Additional reporting by Marwa Awad, Maha El Dahan, Omar Fahmy and Edmund Blair; Writing by Alistair Lyon; Editing by Ruth Pitchford)