Ammon News - CAIRO (Reuters) - Egypt is heading for a "dark tunnel", says the head of its armed forces. How he and his generals respond to a political showdown in the streets may determine whether its new democracy survives to see the light.

The warning at the start of the week from General Abdel Fattah al-Sisi was presented as a wake-up call to the rival factions, President Mohamed Mursi and his Islamist allies on one side, a disparate coalition of liberals and a mass of Egyptians simply frustrated by economic stagnation on the other.

But the velvet glove of Sisi's language, urging politicians to find consensus and avert bloodshed, could not conceal an iron-fist of possible intervention, even if he was widely believed when he said the generals, secure and prosperous in their new role, have no wish to go back to running the country.

One thing is clear. The "consensus" Sisi urged politicians to reach this week is absent. A vague offer from Mursi of collaboration was met with disdain from the opposition.

So whether the generals step in, with their half million men, U.S.-funded hardware and a 60-year-old sense of entitlement, now depends on how the next few days play out at flashpoints like Tahrir Square and Mursi's palace in Cairo and on the streets of a dozen other major cities across the country.

The numbers on the street will matter. So too will violence.

Both sides say they take heart from Sisi's promise to defend the "will of the people". For the Islamists, that means the president and government freely chosen in a series of elections at which they defeated a rudderless opposition.

But Mursi's rivals believe they can bring millions more out to demonstrate, especially on Sunday, the anniversary of Mursi's inauguration, to that the popular will lies elsewhere - much as they did when the Arab Spring uprising of early 2011 persuaded the army that Hosni Mubarak's days in power were over.

Few believe Sisi and a new generation of leaders elevated by Mursi want to grab long-term control in a full coup by a military that is held in high regard by almost all Egyptians.

But many of the Islamists' adversaries, from hardline Mubarak nostalgists to liberal idealists, seem ready to welcome a short-term shove by the army to abort the direction the revolution has taken and give a second chance to efforts to agree an institutional framework to end the polarized deadlock.

TRIGGERS

Whether the army will do so, and how far it might push Mursi, probably depends on two potential triggers:

The first, Sisi spelled out explicitly, is violence. If there is blood on the tarmac, perhaps gunplay, the generals who already have troops deployed in the background, could invoke "national security" and a government failure to keep order.

"The army has made its position clear: it will not allow violence and won't stand by if things seem to be getting out of control," one military source told Reuters on Thursday after the opposition rejected Mursi's overtures. Leaders on neither side seemed fully capable of controlling their supporters, he added.

The second, less explicit trigger, is how the military may interpret the popular will. While their financial sponsors in Washington have angered the opposition by urging them not to overturn the result of Mursi's election, the army listened to the voice of the street before, in ousting Mubarak.

A number of protest movements since the uprising have fizzled out quickly. That cannot be ruled out again. Although a petition against Mursi claiming to have 15 million signatures lends weight to anecdotal evidence that many will up.

The military source who spoke to Reuters said a turnout at opposition protests on the scale of 2011 - many millions drawn from across society and prepared to stay on the streets for days or weeks - could see Mursi obliged to relent: "If the protesters' numbers exceed those seen during the revolution, then everybody's position will have to change," he said.

"No one will be able to oppose the will of the people," he added. "At least, not for long."

Veteran commentator Mohamed Hassenein Heikal, who has close ties to the military, told a television interviewer the army was concerned at a lack of vision for the future among politicians: "The army will always side with the people," he said. "Whether their will is expressed at the ballot box or in some other way."

CONFRONTATION

Few independent observers can assess with much certainty how the showdown between the factions will play out.

Both seem unwilling to flinch: Mursi and his Muslim Brotherhood insist on their electoral legitimacy and tell opponents just to fight another election in due course; the opposition coalition demands Mursi resign and make way for an interim authority to reset all the rules before new elections.

"The two sides' demands are pretty maximal so I see possibilities for real confrontation," said Nathan Brown, an expert on Egypt's transition at George Washington University who was in Cairo this month. "Significant violence is a possibility.

"Even if you have military intervention it's not clear of what kind or whether it would solve anything."

Opponents accuse the Brotherhood of feigning interest in democracy while aiming to entrench themselves deep in the state as Mubarak's people did. Mursi and his allies in turn accuse many in officialdom, and the media, of sabotaging their efforts.

Anti-Islamist sentiment in the police and other security organs that led Mubarak's fight against them for decades adds an element of doubt to the government's ability to staunch the kind of violence that might trigger an intervention by the army.

One source inside one of the domestic security agencies told Reuters this week that many in his organisation were hoping that a violent confrontation could bring down Islamist rule:

"There's a battle coming between us and the jihadists," he said. "We need to cleanse the country of them.

"More state agencies will join us once they see the violence those terrorists inflict - as they will in the days to come."

Such talk, while impossible to verify how widespread it is, somewhat supports allegations by Mursi's government that agents provocateurs from the old regime are behind recent clashes.

MILITANTS

How easily the army could quell violence is also unclear.

Mursi has relied increasingly on support from more militant Islamists, including al-Gamaa al-Islamiya, a movement that spent years fighting the old regime and had ties with al Qaeda. Its leaders, many freed from jail after the revolution, speak openly of taking up arms again to defend the president. They fear a return to army rule would mean prison again for them, or death.

Nathan Brown said an army move that tried to shut the Islamists back out of the system could prove bloody: "If it came to denying the Islamists political power, the Brotherhood, probably with the support of al-Gamaa, will fight," he said.

"That's what could be very very nasty ... but I don't think a full-scale military takeover is the most likely intervention. There's all kinds of other things they could do short of that."

Yasser El-Shimy, Egypt analyst at the International Crisis Group in Cairo, said he believed that the most the army was likely to do was use its strength to force both sides toward the sort of compromise Sisi spoke about in his warning on Sunday:

"Even if the protests are massive and there is really bad violence," he said, "If the army is to intervene, it will not be to pressure Mursi to resign, or call for presidential elections, but rather to try and make some compromises on the constitution and the government, in order to appease all parties."

Yet those compromises are unlikely to get any easier, especially if more blood is spilt, leaving Egyptian democracy in peril: "It is getting more and more complicated to find a political solution," said a senior Western diplomat in Cairo.

"And the more active the army becomes, the weaker civilian institutions will be. It will be a loss of legitimacy."