The Egyptian army has sealed off all access roads to Tahrir Square and surrounding areas in anticipation of a mass protest on Friday, according to state TV.
Barbed wire and fences are being set up in the central Cairo square that has become a focal point for protests after the Muslim Brotherhood called for a "day of anger" in protest against the ousting of Mohammed Morsi as president and the military crackdown that has subsequently gripped the country.
Around 525 people have been killed during the violent clashes between the military and supporters of Morsi belonging to the Muslim Brotherhood, according to the Egyptian ministry of health, although higher figures are being reported.
The consensus is that the death toll will rise further on Friday after the Brotherhood called for a nationwide march of millions following Friday prayers (at midday local time) to show their anger at the crackdown.
(Read more: Scenes from the turmoil in Egypt )
"After the blows and arrests and killings that we are facing, emotions are too high to be guided by anyone," Brotherhood spokesman Gehad El-Haddad said. "Despite the pain and sorrow over the loss of our martyrs, the latest coup makers' crime has increased our determination to end them," a statement from the party said.
President Obama condemned the response of the Egyptian military, saying the U.S. deplored violence against civilians. He canceled joint military exercises with the Egyptian army, to whom the U.S. gives $1.3 billion in annual aid, but stopped short of cutting aid to the country.
After holding an emergency meeting, the United Nations (UN) Security Council urged all parties involved in the violence to exert the "maximum restraint."
(Read more: Death toll mounts in Egypt as 'civil war looms' )
The Egyptian army remained defiant however, warning that it would turn its guns on anyone who attacked the police or public institutions during protests. It said Obama's criticism was not based on facts and that it could encourage violent groups to commit "terrorist acts."
The Egyptian stock exchange was shut and planned to open again next week while the central bank told all banks to stay closed. Importantly for the oil market, shipping sources said the Suez Canal and its ports were operating normally.
The violence could also have a negative impact on the Egyptian economy, which relies heavily on tourism, as the state of emergency and nationwide curfew remain in place. A number of international car manufacturers also halted operations in the country on Thursday.
Toyota (Tokyo Stock Exchange: 7203.T-JP) and Suzuki (Tokyo Stock Exchange: 7269.T-JP) halted production in Egypt, the Nikkei newspaper reported, while General Motors (GM) also closed its plant and offices, which employ around 1,400 people, amid concerns for their safety.
Home appliance maker Electrolux (Stockholmsborsen:ELUX.B-SE) also halted production at its factory outside Cairo, where it employs 7,000 people. Oil major Royal Dutch Shell (London Stock Exchange: RDSA-GB) shut its offices and restricted business travel. BP said oil production was not affected.
(Read more: Clashes in Egypt, but investors remain upbeat )
The violence was sparked on Wednesday after security services moved in to clear two pro-Morsi protest camps in the capital city of Cairo. The violence has spread to other cities in Egypt.
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