By Dina Zayed and Phil Stewart
CAIRO (Reuters) - Egypt approved a law on Wednesday easing curbs that choked political life under deposed President Hosni Mubarak, opening the door for the formation of new parties that will compete in elections this year.
The law is expected to result in a plethora of new parties, including one to be established by the Muslim Brotherhood -- an Islamist group that was banned under Mubarak.
U.S. Secretary of Defense Robert Gates, visiting Cairo for the first time since Mubarak was toppled, said Egyptians who had become active in politics should have the time "to develop political parties and to develop organization and structure."
But he steered clear of an Egyptian debate about the timetable the military has charted toward legislative elections as soon as September -- a timeline criticized as too tight by nascent political groups who want to get organized first.
Some opposition groups, which were crushed for decades by Mubarak, say the schedule favors the well-organized Brotherhood and remnants of Mubarak's ruling party.
"We are racing against time," said Shady Ghazali Harb, a member of a coalition of youth groups that mobilized protests against Mubarak. "They are pressuring us with the time factor because of the insistence on holding elections so soon."
Asked about the timetable, Gates said: "I'm absolutely not going to second-guess either the supreme council or the interim government." He is due to meet the head of the council, Field Marshal Mohamed Hussein Tantawi, Thursday.
Mubarak's Egypt was a close ally of the United States, which still has close defense ties with the Egyptian military. Washington praised the army's role during the Egyptian uprising that helped inspire revolts against autocrats across the region.
Washington is also watching closely to see what kind of role the Brotherhood will play in the new Egypt.
The Brotherhood's "Freedom and Justice Party" is expected to be announced within days. Its growing prominence, along with more radical Islamist groups that were crushed by Mubarak, has alarmed secular intellectuals and activists who joined forces with the Brotherhood in the uprising.
The Brotherhood has sought to reassure other Egyptians, saying it will not seek a parliamentary majority or the presidency in the elections later this year.
"This is a temporary position until the time there are forces that can compete. At that point, we will take part in the competition," said Mohamed el-Beltagi, a Brotherhood leader.
FORMER MINISTER CHARGED WITH KILLING
Under Mubarak's rule, parties needed a license from a committee headed by the head of the upper house of parliament, who was also a leading figure in the ruling party.
Opposition parties that did exist were at best seen as a joke and at worst pliant tools of the Mubarak administration. The new law requires parties to secure the backing of 1,000 founding members from at least 10 provinces. It removes a stipulation that parties must not have a religious basis, but says they should not discriminate on the grounds of religion.
The military appears keen to relinquish power as quickly as possible to a civilian, elected government.
Egypt passed a milestone on the road to elections at the weekend when amendments to the constitution were passed by a large majority in a referendum. The changes open up competition for the presidency held by Mubarak for three decades.
The military council issued a constitutional decree on Wednesday which included the amended articles. The decree is designed to "organize authority in the interim period" and will last until legislative and presidential elections are held.
Further legal steps were taken against symbols of Mubarak's rule. The public prosecutor referred Habib al-Adli, the former interior minister, and four other high-ranking officers for trial on charges of killing protesters, disrupting stability, and of spreading "chaos in the country" that harmed Egypt's economy, a statement said.
A committee set up to investigate violence during demonstrations that toppled Mubarak also laid charges against the former president for intentional murder of protesters, a state newspaper said.
The stock exchange opened for the first time since January and the main index tumbled 8.95 percent.
(Additional reporting by Marwa Awad, Patrick Werr, Ashraf Badr; Writing and additional reporting by Tom Perry; editing by Philippa Fletcher)