Egypt's interim cabinet has offered its resignation to the country's ruling military council as clashes raged for a third day in Cairo's Tahrir Square, pitting police and soldiers against protesters demanding democratic change.

"The government of Prime Minister Essam Sharaf has handed its resignation to the [ruling] Supreme Council of the Armed Forces," Mohammed Hegazy, cabinet spokesperson, said in a statement aired on Monday night by the official MENA news agency.

"Owing to the difficult circumstances the country is going through, the government will continue working" until the resignation is accepted, Hegazy added.

The resignation comes as Egyptians clashed with security forces in what has been some of the worst since the overthrow of Hosni Mubarak, the former president, in February.

Egypt's health ministry said at least 22 people have been killed and 1,500 wounded in clashes between government forces and protesters since Saturday, raising concerns over parliamentary elections due to begin later this month.

'Organised protests'

"Thousands of people in unison are chanting 'The people want the end of the field marshal’,” Al Jazeera’s Sherine Tadros reported on Monday night from Tahrir Square, referring to Field Marshal Mohamed Hussein Tantawi, the leader of the military council.

“For the past 48 hours, there have been sporadic calls for some kind of organised protests.”

Locations where Egyptians were protesting on Monda

Tahrir Square has become the major rallying point for protesters, recalling the 18-day uprising that ended Mubarak's three decades of power.

Tadros reported that thousands of people began flocking into Tahrir Square on Monday evening, with ambulances coming in to take away the injured.

"The resolve of people is pretty amazing, they keep showing up… everyone seems to feel this is very much a battle between them and the police,” she said.

Egyptian political forces behind the uprising that toppled president Hosni Mubarak called for a mass rally to demand the army cede power to civilian rule, following three days of deadly clashes.

Tahrir Square and surrounding area in central Cai

The Coalition of Revolution Youth and the April 6 movement, among others, have called for the protest at 4:00 pm (1400 GMT) on Tuesday in Tahrir Square.

Reporting from the seaside town of Alexandria, Al Jazeera's Rawya Rageh said a 'million man march' was also being planned there for Tuesday.

Sporadic clashes between protesters and security forces erupted throughout the day on Monday in Cairo and other parts of the country, notably Alexandria and Suez in the north.

During the clashes in Cairo, police fired tear gas and rubber bullets while protesters broke up pavements to hurl chunks of concrete at police.

General Saeed Abbas, deputy head of the central military region, said that the military was protecting government buildings and not targeting protesters.

"The armed forces were dispatched following a request from the interior minister. It was approved by the head of the military supreme council to assist the security forces in protecting the ministry of interior, nothing else," Abbas said. "They did not come to disperse protesters, or to remove them from Tahrir Square. They didn't leave the vicinity of the interior ministry."

Few of the protesters believe this message, however, as footage showing police brutality continues to emerge.

Military seeks distance

As the death toll continued to rise on Monday, the military tried to distance itself from the violence.

The Supreme Council of the Armed Forces (SCAF), Egypt's ruling council, repeated its commitment to its "roadmap" for transition and expressed "sorrow" over the situation.

Egyptians are scheduled to elect a new parliament in a staggered vote that starts on November 28. Yet, even when the assembly is picked, executive powers would remain with the army until a presidential election, which may not happen until late 2012 or early 2013. Protesters want a much swifter transition.

"We are all insisting on having the election on time; the government, parties and the Supreme Council of the Armed Forces," Mohamed Hegazy, a cabinet spokesperson, said.

The security crackdown on protesters elicited condemnation from parties across the political spectrum;from Mohamed ElBaradei, a presidential hopeful and head of the National Association for Change, to the Muslim Brotherhood's Freedom and Justice Party.

Anti-graft law

In what appeared to be a concession to the protesters, Egypt's ruling generals issued a law on Monday barring anyone found guilty of corruption from politics, but protesters said it would not allay their concerns that former supporters of Mubarak may regain influence.

"The council is out of step with the people," Mohamed Fahmy, an activist, said.

Protesters are also demanding a presidential election be held by April 2012 and a complete overhaul of the interior ministry.

A press conference planned for Monday to detail how the election process would proceed was postponed with no new date set.

Meanwhile, several political parties and individual candidates said they were suspending their electoral campaign, raising concerns over whether the vote will go ahead at all.

Finance ministers from the Arab League have agreed on a draft plan for a package of economic sanctions against Syria, including the suspension of commercial flights to the country and dealings with the central bank.

The decision came after a meeting of the league's economic and social committee in Cairo on Saturday night. Its recommendations will now be passed to the full Arab League for consideration.

The organisation had set a Friday deadline for Damascus to allow rights monitors into the country, but the deadline passed with no firm commitment from Syrian officials.

The sanctions package also calls for Arab states to freeze the overseas bank accounts of key Syrian regime officials.

Syrian foreign minister Walid al-Muallem criticised the decision in a letter to the Arab League, accusing it of trying to "internationalise" the conflict in Syria.

Muallem called the sanctions an invitation "for foreign intervention instead of a call to avoid one... what we understand, by this latest Arab League decision, is a tacit green light for the internationalisation of the situation in Syria and to meddle in its domestic affairs."

The sanctions were strongly opposed by both Lebanon and Iraq, which have both said they will not impose sanctions against their neighbour. Hoshyar Zebari, the Iraqi foreign minister, said on Saturday that it was "not possible" to impose economic sanctions on Syria due to its commercial ties with Iraq and the large number of Iraqi refugees there.

The US and the European Union have already imposed major sanctions, including an oil embargo, on the Syrian leadership.

Violence continues

Activists in Syria said that at least nine people were killed on Saturday, most of them in the eastern town of Deir az-Zor, and that army defectors killed eight Syrian soldiers.

The violence followed an even bloodier day on Friday, when activists said 26 people were killed, most of them in Homs. The province also saw an ambush which led to the killing of 10 security personnel, including six elite military pilots, according to the Syrian armed forces quoted by the state-run SANA news agency.

The military blamed "terrorists" for the attack, and threatened to "cut every evil hand" that targets the country's security. 

The Syrian leadership blames the unrest in the country on a foreign plot, saying "armed terrorists" are driving the uprising.

The financial crisis that began in Europe now poses a real threat to the entire global economy, according to a major economic organisation.

The Organisation for Economic Co-operation and Development (OECD) issued the warning as it cut its global growth forecast for this year and next, and European leaders struggled to contain debt and save their common currency.

The British finance minister is to deliver on Tuesday a statement that is expected to support strict spending cuts, despite a planned general strike.

And in Brussels, eurozone finance ministers are meeting to discuss bolstering their bailout reserve, the European Financial Stability Fund (EESF), to help prevent contagion in bond markets.

Tuesday's meeting of the Eurogroup brings together finance ministers from the 17 eurozone members who are likely to approve the next tranche of emergency loans for Greece and Ireland.

Underlining the threat to European economies, however, the ratings agency Moody's warned on Tuesday it could downgrade the subordinated debt of 87 banks across 15 countries on concerns that governments would be too cash-strapped to bail them out.

Standard & Poor's, Moody's rival, could downgrade the outlook on France's top-level triple-A credit status with the next 10 days, hinting at a possible ratings cuts, a newspaper reported. The news briefly hit the euro.

Under US pressure

Barack Obama is pressuring European Union officials to act quickly and decisively to resolve their sovereign debt crisis.

Jay Carney, the White House spokesman, said the US president's message, delivered to senior EU officials behind closed doors on Monday in Washington, was that: "Europe needs to take decisive action, conclusive action to handle this problem, and that it has the capacity to do so."

Documents obtained by the Reuters news agency on Sunday show the detailed guidelines for the EFSF were ready for approval, opening the way for new operations and multiplying the fund's effective size.

The documents spell out rules for EFSF intervention on the primary and secondary bond markets, for extending precautionary credit lines to governments, leveraging its firepower and its investment and funding strategies.

"I would expect we will be in a position to approve the guidelines at a political level," a euro zone official involved
in the preparations for the ministers' meeting said.

The EFSF guidelines will clear the way for the 440bn euro facility to attract cash from private and public investors
to its co-investment funds in coming weeks.

Germany and France stepped up a drive on Monday for coercive powers to reject euro zone members' budgets that breach EU rules, alarming some smaller nations who fear the plans by-pass mechanisms for ensuring equal treatment.

Berlin and Paris aim to outline proposals for a fiscal union before an EU summit on December 9 increasingly seen by investors as possibly the last chance to avert a breakdown of the single currency area. 

"We are working intensively for the creation of a Stability Union," the German finance ministry said in a statement.

"That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits."

Heart of Europe

Rumours about the threat to France's credit rating, which have circulated for several months, illustrate how the crisis has moved from indebted peripheral nations such as Greece and Portugal to the heart of Europe.

La Tribune, an economic and financial daily, reported on its website that S&P's was preparing to change its outlook on France's sovereign rating from "stable" to "negative".

The news coincided with the warning on subordinated debt from Moody's, which said the greatest number of ratings to be reviewed were in Spain, Italy, Austria and France, and knocked the euro a third of a cent before the currency recovered.

"Moody's believes that systemic support for subordinated debt in Europe is becoming ever more unpredictable, due to a combination of anticipated changes in policy and financial constraints," the agency said in a report.

Mario Monti, Italy's prime minister and finance minister, will attend Tuesday's meeting in Brussels to explain the reforms Italy plans to undertake to regain the confidence of markets.

After a disappointing finish in the Iowa caucuses, Rick Perry is suspending his bid for the Republican presidential nomination.

Speaking to supporters in Iowa, the Texas governor said he would return home Tuesday night rather than head to South Carolina, as he had planned.

Though he stopped short of a final declaration, it was clear in his tone that Perry was eyeing an end to his campaign.