***

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below.

CAIRO (AP) — Egypt’s military rulers were facing mounting pressure on two fronts Sunday, with a fourth day of violent street protests spearheading calls to speed up the transfer of power to a civilian administration and the U.S. threatening to cut more than a billion dollars in badly needed aid.

The protests, which were sparked by anger at the authorities inability to prevent a riot after a soccer match last week left 74 people dead, have morphed from a demonstration of anger at the police into renewed calls on the military to step down. The fresh wave of violence has also thrown into question the general’s legitimacy to rule and their handling of Egypt’s transition to democratic rule.

In downtown Cairo, security forces fired salvos of tear gas at thousands of rock-throwing protesters marching on the Interior Ministry. Thick white smoke clogged the streets around the ministry, and medics had set up field hospitals to treat the injured on nearby Tahrir Square, the heart of the uprising that toppled Hosni Mubarak last February. Since Thursday, 12 people have been killed in Cairo and Suez, another hotbed of anti-government protests east of the capital.

While the protesters have been the most vocal in their demands the military step down, they increasingly have been joined by politicians and lawmakers.

On Saturday, a consultative council appointed by the military proposed speeding up the transfer of power by holding presidential elections earlier than the current deadline of the end of June. It suggested opening the door for nominations on Feb. 23, which would allow the vote take place as early as April. The council is composed of political leaders, experts and representatives appointed by the military months ago in what activists believed to be an attempt to add civilian cover to army rule.

Egyptian presidential hopeful and ex-Arab League chief Amr Moussa on Saturday also threw his weight behind a speedier transition.

However, the Islamist Muslim Brotherhood group that holds nearly 50 percent of the seats in parliament has been hesitant to back the move, and has on several occasions supported the military’s current hand over timetable.

The explosive street protests have been coupled with warnings from the United States — a key ally — of cutting aid following raids on 17 pro-democracy and rights groups as well as a ban on some American aid workers from leaving the country. U.S. officials blasted the raids, which Egyptian officials have defended as part of a legitimate investigation into the groups’ work and finances.

On Saturday, U.S. Secretary of State Hillary Rodham Clinton warned Egypt’s foreign minister that failure to resolve the dispute may lead to the loss of American aid. Washington is due to give Egypt $1.3 billion in military assistance and $250 million in economic aid in 2012.

A loss of that funding would be a blow to Egypt’s military rulers and the interim government, who already are struggling to meet the country’s needs.

The uprising a year ago sent in motion a downward fiscal spiral from which Egypt has yet to emerge. Tourism and foreign direct investment, two key foreign revenue mainstays, have been hit hard.

To cope with a budget deficit seen by many analysts as widening past the 8.6 percent of GDP which officials are targeting, the government has reached out again to the International Monetary Fund for a $3.2 billion loan. It has also submitted a request to the World Bank for $1 billion.

The IMF funding is seen as key to Egypt securing billions more in aid from other institutions.

Meanwhile, Egypt showed no flexibility in its position in the spat with the U.S.

On Sunday, Egypt’s foreign minister, Mohammed Amr, responded to Clinton’s warnings, saying the Egyptian government can’t intervene in an investigation. “We are doing our best to contain this but … we cannot actually exercise any influence on the investigating judges right now when it comes to the investigation,” he told reporters.

He insisted that “the executive branch has nothing to do” with the investigation.

Among the Americans barred from leaving Egypt is Sam LaHood, the head of the Egypt office of the Washington-based International Republican Institute and the son of U.S. Transportation Secretary Ray LaHood.

The ban came as part of Egypt’s investigation into foreign-funded organizations blamed for fueling street protests.

“We are very clear that there are problems that arise from this situation that can impact all the rest of our relationship with Egypt,” Clinton told reporters in Germany. “We do not want that. We have worked very hard this past year to put in place financial assistance and other support for the economic and political reforms that are occurring in Egypt.”

Under U.S. law, Clinton must certify to Congress that Egypt is meeting certain requirements, including enacting democratic and rule of law reforms, in order for the assistance to be released.

With the U.S. voicing concerns about the NGO workers and the military’s commitment to democratic reform, it could call into question additional funding sources from the European Union, for example, which also wants to see Egypt makes democratic reform strides and commitments.

_______________________________________________