By Marwa Awad
CAIRO (Reuters) - Egypt will elect a new president by the end of the year, the ruling military council said on Wednesday, laying out more details of the political transition which Egyptians hope will produce a democratic government.
The new head of state would be elected a month or two after parliamentary elections scheduled for September, said Mamdouh Shaheen, a member of the military council which has governed since popular protests toppled Hosni Mubarak on February 11.
"The military council will give up legislative powers to the new parliament once it is formed and will give up the remaining presidential powers to the president once a new president takes office," Shaheen said during a news conference.
Candidates for the position held by Mubarak for three decades include Arab League Secretary General Amr Moussa and former U.N. nuclear watchdog chief Mohamed ElBaradei, both civilians seeking a job held by former military men since the 1950s.
The election will be held according to new rules that open up competition for the position and limit presidents to two, four-year terms. Mubarak was in his fifth, six-year term when he was swept from power by a mass uprising.
Shaheen said Egypt needed a new president for "stability and development." The turmoil of the last two months has harmed Egypt's economy, dealing a blow to tourism among other industries. Reflecting uncertainty, the Egyptian pound is at six-year lows against the dollar.
Alia Mamdouh, an economist at CI Capital, said the timetable unveiled by the military this week had eased concerns that the interim period of military rule could drag on. "The sooner things settle down, the better for the economy," she said.
The military council is seen as eager to relinquish power as soon as possible to a civilian, elected government. It dissolved parliament and suspended the constitution a day after taking power from Mubarak.
Governing by decree, the military issued a temporary constitution on Wednesday that will serve as the legal basis for government until a new constitution is drawn up.
STATE MEDIA SHAKE-UP
The decree was drawn up in collaboration with legal experts and included amended sections of the old constitution that were approved by a referendum on March 19.
It reiterates the old constitution's stipulation that Islam is the religion of the state and says the principles of the sharia are the primary source of legislation.
It declares Egypt a democratic state, says peaceful protests are allowed and guarantees freedom of expression and free press.
The new parliament is set to draft an entirely new constitution -- a process that could take a year or more.
Shaheen said a committee comprising up to 200 people including judicial experts would be formed next week to work on a draft constitution to be put to the new constitutional body.
Egyptians who took to the streets to topple Mubarak are still pressing demands for deep reform to an autocratic system of government. While Mubarak has been removed from power, reformists are concerned by what they see as the lingering influence of some elements of his administration.
Activists have called for a large rally in central Cairo on Friday "to protect the revolution."
"The only concrete accomplishment is that there is no Mubarak and no Gamal," said George Ishak, a leading figure in the protest movement that mobilized in opposition to Mubarak and any moves for his son, Gamal Mubarak, to inherit power.
In an interview, he urged more aggressive legal measures against Mubarak and figures associated with his administration. He also said remnants of the hated state security agency, officially dissolved this month, must be uprooted.
In a move that met some of the reformists' demands, the interim government on Wednesday sacked the editors of leading state-owned newspapers, including the head of the flagship al-Ahram newspaper, Osama Saraya.
He was replaced by Abdel Azim Hamad, the former editor of an independent newspaper and an al-Ahram veteran who is a prominent political commentator.
"The restructuring of Egypt's media sector comes along with the spirit of change and as a response to the demands of the current phase Egypt is witnessing," Prime Minister Essam Sharaf said. Sharaf also decided on Wednesday to form a ministerial legislative committee to draft laws until parliament is elected.
(Additional reporting by Dina Zayed, Tom Perry and Sherine El Madany; Writing by Tom Perry)