Analysis: With Brotherhood out, old order shapes Egypt's future By Tom Perry and Lin Noueihed CAIRO (Reuters) - Workers in blue overalls clamber over scaffolding around Rabaa al-Adawiya mosque, whitewashing its charred walls to restore a semblance of normalcy to the corner of Cairo where the struggle for Egypt reached a bloody climax this month. After a stunning reversal in which the army seized upon a tide of public discontent to overthrow freely elected President Mohamed Mursi, the powerful state apparatus appears to have all but neutralized the Muslim Brotherhood to which he belongs. Not only that. Even as the army-backed government promises to shepherd Egypt towards democracy, its plans for a new political transition speak of a deep entrenchment of the old order that ran Egypt under veteran autocrat Hosni Mubarak. In the space of a few weeks, security forces have arrested the Brotherhood's leaders and killed its supporters by the hundreds in the streets. Meanwhile, a committee appointed without debate has proposed constitutional amendments that would open the way for a political comeback by Mubarak-era officials. The prospect of financial meltdown has been staved off by billions of dollars in aid from Gulf states hostile to the Brotherhood, and Western censure has been muted, at best. In a highly symbolic victory for the old guard, the 85-year-old Mubarak was himself released from jail last week, albeit to await a retrial for ordering the killing of protesters in 2011. Keen to show support for the army, Egyptians who may once have displayed pictures of Mubarak now celebrate Egypt's new top soldier, Abdel Fattah al-Sisi, a hero to those who rallied against Brotherhood rule. One Sisi fan in Cairo is reportedly selling chocolate treats bearing the general's image. And in language that would have been unthinkable only a few weeks ago, a state-run magazine this week described the 2011 uprising that toppled Mubarak as a "setback." With a nightly curfew enforced by the army, Cairo seems eerily calm. It is hard to believe Egypt has just suffered the bloodiest week in the Arab republic's history. More than 900 people were killed, including some 100 police and soldiers, after security forces on August 14 destroyed the protest camps set up by Mursi's backers after he was toppled. The state had labeled the sit-ins a "threat to national security." Accusing the Brotherhood of turning to violence - a charge the Brotherhood rejects as a pretext for the crackdown - the government has declared a "war on terrorism." Fear has sucked the momentum from anti-government protests, and the arrests of Mursi and the other leaders have muted the Brotherhood's voice. Essam el-Erian and Mohamed el-Beltagi, lawmakers even under Mubarak, have been reduced to issuing video messages from hiding. Ahmed Mefreh of the international rights group Alkarama Foundation said more than 2,000 Mursi supporters had been arrested in Cairo alone. "The Brotherhood were losers in an impossible confrontation," said Hassan Nafaa, a professor of political science at Cairo University and veteran political activist. The first draft of the new constitution seeks to restore the voting system that kept Mubarak in power for 30 years, something that has disappointed smaller parties that have struggled to establish themselves since the end of his one-man rule. It would also lift a ban on former members of his government seeking office, and remove controversial Islamist-inspired language brought in last year. The government has begun to revive the political security apparatus that was shelved, but not dismantled, after the 2011 revolt. It has appointed ex-military figures to positions which, like the presidency, were once dominated by them. It seems unlikely the next president will be a rival to the power of the old establishment. The oath of allegiance sworn by conscripts no longer mentions loyalty to the head of state. "What you will see is a very diminished role for the presidency - except of course if a military or security figure decides to run for that position," said Nathan Brown, a leading expert on Egypt at George Washington University. He also noted that in contrast to other countries, where the army might pledge loyalty to the constitution and laws, in Egypt, soldiers and officers will not swear allegiance to "any civilian official, law or procedure." Exhausted by 2-1/2 years of turmoil, many Egyptians now believe only the army can restore stability, and the military, which suffered a public backlash after taking power in 2011, has proved more adept this time at marshalling support. Even though he has indicated he doesn't want the job, the 58-year-old Sisi looks an obvious candidate for president. Speculation that he will run has intensified since a first photo emerged last week of the general in civilian clothes. "General Sisi is a popular hero par excellence, and if he decides to enter the elections he is the most popular at the moment," said Hamdeen Sabahi, a leftist who came a close third in last year's presidential election and backed Mursi's removal. Sabahi believes Sisi will stick by his word not to run. Nevertheless, state TV aired a show on Wednesday discussing the merits of a president from the military, in which the guest said there was nothing wrong with having a general at the helm. As yet, nobody has declared their candidacy - in contrast to the frenzied campaigning before the vote won by Mursi last year with the help of the Brotherhood's unrivalled political machine. Asked about his own aspirations, Sabahi told Al-Masry Al-Youm newspaper he had yet to decide: "Now is a moment that requires national ranks to unite in the face of terrorism." State media now describe the Muslim Brotherhood in terms akin to al Qaeda. The "war on terrorism" that the government has announced has already seen two of its top leaders put on trial on charges of inciting murder, by a court they say is political. Pro-Brotherhood protests, though still continuing, have shrunk dramatically, stifled in part by a state of emergency. "I do not go out in any protests where there is danger," said one 26-year-old Brotherhood activist in the Mediterranean city of Alexandria who asked not to be named. We've been demonstrating for two months and achieved nothing. Speaking by phone from hiding, Brotherhood politician Farid Ismail said opposition to the "putschist regime" was large and growing. "They want to make it seem that matters are proceeding through fait accompli politics," he said. They will not win. This is not victory. But the group has few tools at its disposal to press the demand to which it still clings in public: a solution based on the constitution that was endorsed by a referendum last year. "They now understand that they have lost and are under pressure from a wave of repression and arrests," said a Western diplomat. So they are in a second phase of saying they won't return to any political process unless the repression stops and there are releases. Though experts on the Brotherhood dismiss the idea it would be directly involved in violence, some have voiced fears that grievances could fuel a new wave of attacks by Islamist militants, reminiscent of the campaign of the 1990s and 1980s. Western nations that sought to forge a deal between the Brotherhood and the government still advocate reconciliation to keep the group in formal politics. But the prospects seem dim. So far, it appears that the Brotherhood will not be part of the 50-member assembly that will discuss the new constitution. Even some of those who backed Mursi's removal now warn against ostracizing such a large and established organization. "We must not repeat the mistakes of the Muslim Brotherhood - using the fact that the balance of power is in the favor of a particular party right now - and disregard the views of another segment of the population," said Khaled Dawoud, spokesman for the liberal Dustour Party. We need a political solution to the problem that would reintegrate the Muslim Brotherhood into the political process because the price of security confrontation alone is very hefty, in the short term and in the long term. Pro-reform activists argue that a return to the past is impossible after the 2011 uprising and that any effort to roll back their gains would eventually spawn a new protest movement. The constitution has yet to be finalized and they will oppose clauses that seek to limit new freedoms, these activists say. But for now, barring a major rethink on all sides, the Brothers look set to sit out the new transition from the sidelines - or jail. Writing by Tom Perry; Editing by Kevin Liffey and Alistair Lyon