By Maggie Fick
LUXOR, Egypt (Reuters) - When President Mohamed Mursi made a hardline Islamist governor of Luxor, it seemed his latest folly to many in this city, and across Egypt, who depend on tourists already scared off by unrest since the revolution.
Yet nominating a member of al-Gamaa al-Islamiya, remembered for a 1997 massacre of visitors in Luxor that some call "Egypt's 9/11", showed the growing importance to the beleaguered Mursi and his Muslim Brotherhood of a group whose leadership includes at least one unrepentant former associate of Osama bin Laden.
That man, cleric Refai Taha, and other leaders of al-Gamaa and its parliamentary wing in Luxor told Reuters they renounced violence because Islamist rule had now been achieved, through elections - but they would take up arms again to defend Mursi and were committed eventually to establishing full Islamic law.
"There is freedom now, so violence is not necessary," Taha, 58, said in an interview last week at a hotel on the Nile. "The revolution changed the situation in Egypt in ways we wanted."
But like other senior figures in al-Gamaa he warned that anyone trying to force Mursi out - referring to the military that oppressed the Islamists for decades, or liberal opponents planning mass protests next Sunday - would be met with force.
"Violence begets violence," said Taha, recalling attacks on the old regime and its tourist industry which he, unlike others in al-Gamaa, went on advocating until Hosni Mubarak was ousted.
Al-Gamaa gave in to the uproar in the tourist industry and resigned the Luxor governor's post on Sunday - for the national good - after failing to reassure angry hoteliers who feared it would immediately ban beer and bare flesh, killing their trade just as the gunning down of 58 foreigners had done 16 years ago.
But its role is clearly expanding at the side of a president unable, or unwilling, to build a coalition beyond the Islamist camp. Such hardline allies may further polarize a still fragile state in ways that trouble the Western powers which abandoned Mubarak when Egyptians pushed him aside demanding democracy.
Al-Gamaa supporters formed a vocal contingent at a rally in Cairo on Friday, organized by the Brotherhood to show Islamist strength ahead of protests the hitherto divided opposition plans on June 30, the first anniversary of Mursi's inauguration.
Al-Gamaa leaders were among those giving veiled warnings of a violent response to any move against the elected leader; they included Tarek al-Zumar, jailed for life over the 1981 assassination of Mubarak's predecessor Anwar Sadat, and Assem Abdel Maged, who once shared a cell with Ayman al-Zawahri, the Egyptian who has led al Qaeda since bin Laden was killed.
Hardliners fear the end of the much bigger Brotherhood's hold on power would mean prison again for them, or death.
In Luxor, Taha blames the United States for his "rendition" from Damascus in 2001 to a life in Mubarak's jails. He was in Syria after time in Afghanistan with bin Laden and Zawahri and was seen by Washington as an heir to "blind cleric" Omar Abdel Rahman, al-Gamaa al-Islamiya's spiritual leader now serving a life term for a 1993 attack on New York's World Trade Center.
Until 2010, annual U.S. State Department lists of "Foreign Terrorist Organizations" described Taha as "missing" since 2001. He is not mentioned by name in subsequent editions of the list.
Freed when Mubarak fell, he denied a U.S. assertion that he signed a 1998 al Qaeda fatwa calling for attacks on the United States but he said its government was "oppressive just like our former regime" and said his main difference from Zawahri was in his aim of an Islamic state in Egypt, rather than global jihad.
Sitting in the lobby of a tourist hotel, largely empty since the revolution, clad in a beige robe, the white-bearded sheikh defined his goals and those of al Qaeda: "Sheikh Osama bin Laden and Ayman al-Zawahri see a need to administer justice all over the world. We demand justice be administered in Egypt."
Asked if that would mean banning alcohol or revealing clothing for tourists - something Mursi's government says it will not do - Taha said: "Just as you in America require Muslims to abide by American law when they enter your country, Americans who enter Egypt should abide by Egyptian law."
Were his ideas those of al Qaeda? "The same ideas," he said. "When there is an oppressive regime. If there's an oppressive regime, we, like all people in the world, we fight oppression."
After the Luxor massacre, Taha split with a faction in al-Gamaa which declared a ceasefire; the group now appears united and Taha, back in the southern home region where he helped found the movement in the 1970s, seems to command respect from leaders of the political party it set up in 2011 to contest elections.
The Building and Development Party won 13 of 508 seats in the lower house of parliament, allied with the Brotherhood.
A senior party official in Luxor, Hussein Ahmed Shmeet, echoed the concerns of Taha and other al-Gamaa leaders that it was ready to use force if had to protect Mursi: "If the nation is being destroyed, we must defend ourselves and protect the legitimate president and the state institutions," he said.
"If the army and police cannot protect state institutions and we see violence, the representatives of the Islamic groups must take to the streets to protect the state institutions," Shmeet said, adding for emphasis: "We are very organized."
Opponents worry that Egypt's Islamists also intend to keep power by force, even if voters turn against them. Shmeet insisted, however, that the movement has embraced democracy.
Al-Gamaa's numbers are unclear but its claims to be able to mobilize "popular committees" to fix problems locally were corroborated by Brotherhood officials who said Mursi choice for governor was prompted by its success in using local tribal and family structures to bring order where it once sowed chaos.
"Al-Gamaa al-Islamiya members in Luxor were born here," said local Building and Development Party leader Mohamed Bakry. "They know everyone in Luxor, they're cousins, friends, neighbors - our relations are very strong and so we can solve problems."
What the party did not do was force its new governor through the picket lines of angry tour guides and restaurateurs who set up barricades round the local administration building last week and painted the gate with a sign: "No entry for terrorists."
Its moderation toward the demonstrators, Bakry said, should reassure those who doubt it had put its militant past behind it.
"Everything the media are saying is not true," he said of alarmist headlines about Mursi's choice of "terrorist governor".
"Today is proof of that," he said. "Because if we had wanted to, we could have done something ... We were capable of it."
FEAR AND HOSTILITY
Such veiled references to al-Gamaa's strength do little to appease the many of Luxor's half million people who depend on foreigners coming to see its 3,500-year-old temples and tombs.
"Religion and violence is all they know," said Walid Nowendi of the liberal opposition Dustour Party as protesters burned tires to form a barrier to the governor's office.
Across the Nile, sweeping the same green swath through the desert that has nourished Egyptian civilization for millennia, the temple of Queen Hatshepsut stands as forlorn in the sunshine as it did in the months after it witnessed the horror of six gunmen methodically shooting down 62 people in November 1997.
A lone tour bus and a handful of minivans sat under a baking sun in the parking lot. "You should have seen how crowded this place was before the revolution," said Ahmed Hageb, 24, who works in the cafeteria. "For two years, we've suffered as we did after the 1997 attack ... This is because of the Brotherhood."
Mursi, in a newspaper interview, assured Egyptians economic problems were being addressed and, defending his choice of Luxor governor, insisted there was nothing to fear from al-Gamaa - its party, he said, "operates within the rule of law".
(Editing by Alastair Macdonald and Anna Willard)