Fresh on the heels of Obama's sanction of the Muslim Brotherhood anarchy, the Brotherhood went on a new offensive.
"Egypt's Brotherhood Storms Government Building" SKY News, August 15, 2013
The number killed in Wednesday's violence grows to 525, as the US says its traditional co-operation with Egypt "cannot continue".
Hundreds of Muslim Brotherhood supporters have reportedly stormed a government building in Cairo hours after the group pledged to "bring down Egypt's military coup" using peaceful means.
State TV said Islamists set fire to the governorate headquarters in the capital as the number of people killed in Wednesday's clashes rose to at least 525.
A month-long state of emergency has been declared in the country following the violence that began when security forces stormed two camps set up in support of Mr Morsi.
Meanwhile, international condemnation of events in Egypt grew as President Barack Obama announced the US was cancelling a major joint military exercise with the country.
"Given the depths of our partnership with Egypt ... we've sustained our commitment to Egypt and its people," he said.State TV said Islamists set fire to the government building
"But our traditional co-operation cannot continue as usual when civilians are being killed in the streets."
Mr Obama, who is facing calls to cut the amount of military aid given to Egypt, insisted the US would not take sides in pursuit of a "peaceful, democratic, prosperous" future for the country but added: "The Egyptian people deserve better."
The Muslim Brotherhood, which backs ousted Islamist president Mohamed Morsi, plans to stage a march in Cairo this afternoon to protest against the deaths.
Gehad El Haddad, a spokesman for the group, wrote on his Twitter page: "We will always be non-violent and peaceful. We remain strong, defiant and resolved.
"We will push (forward) until we bring down this military coup."A burnt-out mosque in Cairo following the violence
Speaking to Reuters, he also said that two senior leaders of the Brotherhood had been shot but had not died from their injuries "as far as I know".
A spokesman for Egypt's health ministry told the Associated Press that the number of dead had reached 525 - which the interior ministry has said includes 43 police officers.
At the El Iman mosque in the eastern Nasr City district, dozens of bodies lay wrapped in sheets, waiting to be identified.
The Muslim Brotherhood claimed more than 2,500 people have died.
Hundreds more people are known to have been injured.Sky cameraman Mick Deane was killed in the violence
Those killed included Sky cameraman Mick Deane, who was part of our team covering the unrest. He was shot on Wednesday morning.
Officials said 84 people, including Muslim Brotherhood members, have been referred to military prosecutors on charges of murder and burning churches.
The clashes spread from the capital to other parts of the country, including the Mediterranean city of Alexandria, as a night-time curfew was declared in Cairo and 13 other provinces.
Egypt's interior ministry said it would use live ammunition to confront protesters to who attack government buildings or security forces, according to state TV.
Prime minister Hazem Al Beblawi said he remained committed to the democratic process under a civilian state.
But he justified the use of force, saying Morsi loyalists had been sowing chaos around the country, "terrorising citizens, attacking public and private property".
"The state had to intervene to restore security and peace for Egyptians," he said. "No democratic country would impose an emergency state unless it is absolutely necessary."
Egypt's vice president, Mohamed ElBaradei, announced his resignation following the violence.
"It has become too difficult to continue bearing responsibility for decisions I do not agree with and whose consequences I fear," he said.
Sky's Middle East Correspondent Sam Kiley reported from inside the Rabaa al Adawiya camp on Wednesday.
Describing the fighting, he said: "I have covered many wars and this is as severe a battlefield as I have witnessed, with the exception of scenes in Rwanda.
"There are dozens and dozens of people who have been shot in the head, neck and upper body."
The unrest spread beyond the capital, as supporters of Mr Morsi clashed with police in the Nile Delta cities of Minya and Assiut, as police stations, government buildings and churches were attacked or set ablaze.
In Alexandria, tear gas canisters rained down on a pro-Morsi march in the Sharq neighbourhood, amid repeated bursts of automatic gunfire.
Residents armed with clubs came out of their homes and shops to help the police, detaining Morsi supporters and handing them over to officers at the Sharq police station.
Morsi supporters, carrying Egyptian flags and pictures of the deposed leader, then clashed with his opponents on a road carpeted with rocks.