One dead as Egypt simmers ahead of rallies CAIRO (Reuters) - Egypt's ruling Muslim Brotherhood said one man was shot dead and four wounded in an attack on a provincial party office, stoking factional rivalries ahead of mass rallies starting on Friday. It blamed activists who are campaigning to force President Mohamed Mursi to resign as he marks his first year in office. The incident, in the Nile Delta city of Zagazig north of Cairo, took the death toll to five in factional fighting that has also left scores injured over the past week and raised fears of wider violence during the coming days of demonstrations. Liberal opposition leaders dismissed an offer by Mursi to cooperate on reforms to end a political deadlock that has plunged the biggest Arab nation into economic crisis, two years after the Arab Spring revolution that overthrew Hosni Mubarak. That has set up a showdown in the streets in the coming days. Mursi's Islamist supporters and some opposition groups plan rallies on Friday, and the broad opposition coalition hopes to bring millions out on Sunday to demand new elections. The army has urged both sides to reconcile and has warned that it could step back in to impose order if violence spins out of control - though it insists it will defend the democracy born out of the uprising against Mubarak in early 2011. Mursi and the Brotherhood accuse loyalists of the old regime of being behind violence and of thwarting their efforts to reform an economy hobbled by corruption. Opponents say the Islamists, who have won a series of elections against a diffuse opposition, of seeking to entrench their power and impose Islam. In a speech on Wednesday, Mursi denounced his critics but admitted some mistakes and offered talks to ease polarization in politics that he said threatened Egypt's new democratic system. But opposition leaders said their protests would go ahead. "Dr. Mohamed Mursi's speech of yesterday only made us more determined in our call for an early presidential vote in order to achieve the goals of the revolution," the liberal opposition coalition said after its leaders met to consider a response. We are confident the Egyptian masses will go out in their millions in Egypt's squares and streets on June 30 to confirm their will to get the January 25 revolution back on track. With the start of Egypt's weekend, people began to gather in Cairo's Tahrir Square, site of the uprising of January 25, 2011, and at venues in other towns. The atmosphere was largely festive but there widespread fears of trouble in the days ahead. It is hard to gauge how many may turn out but much of the population, even those sympathetic to Islamic ideas, are deeply frustrated by economic slump and many blame the government. Previous protest movements since the fall of Mubarak have failed to gather momentum, however, among a population anxious for stability and fearful of further economic hardship. The army, which helped protesters topple Mubarak and is on alert across the country guarding key locations, says it will act if politicians cannot reach consensus. In his speech, Mursi threatened legal action against several named prominent figures. Hours after he publicly accused one TV channel owner of tax evasion, the businessman, Mohamed al-Amin found he was under investigation and barred from leaving the country, prompting his lawyer to tell Reuters: "This is dictatorship." Amin's channel notably airs satire modeled on that of U.S. comic Jon Stewart. Separately, officials ordered the arrest of a talk show host on another channel known for his anti-Islamist diatribes and ordered that station to be shut down for inciting mutiny in the army and for insulting the armed forces and the police. An anchor on state television resigned dramatically, live on air, in protest at what he said were attempts by the information minister, an Islamist, to control his program. Instability in the most populous Arab nation could send shocks well beyond its borders. "Egypt is historically a critical country to this region," U.S. Secretary of State John Kerry, who is on a tour of the Middle East, said on Wednesday, highlighting economic problems. "Our hopes are that all parties ... the demonstration that takes place on Friday or the demonstration that takes place on Sunday, will all engage in peaceful, free expression," he said. Reporting by Shaimaa Fayed, Patrick Werr, Asmaa Alsharif, Tom Perry, Maggie Fick, Yasmine Saleh, Omar Fahmy, Alexander Dziadosz, Omar Fahmy and Shadia Nasralla in Cairo and Abdelrahman Youssef in Alexandria; Writing by Alastair Macdonald; Editing by Cynthia Osterman