By Yasmine Saleh
CAIRO (Reuters) - An Egyptian court ruled a three-month state of emergency be lifted on Tuesday, a step that may help the army-backed government restore a semblance of normality after the military ousted President Mohamed Mursi.
But as emergency rule was ordered to end, the government edged a step closer to passing a law on demonstrations that the opposition says could be a new way to curb protests.
The government imposed emergency and nightly curfews on August 14, when security forces forcibly dispersed two Cairo sit-ins by Mursi supporters, touching off the worst domestic bloodshed in Egypt's modern history.
The court ruled the state of emergency had ended at 4 p.m. (9 a.m. ET) on Tuesday, two days earlier than expected. The government said in a statement it was committed to implementing the court ruling and was awaiting a copy of the decision to execute it.
It would mean an end to nightly curfews that have choked economic life, although security forces would not lift the curfew until formally told to do so by the government, a security official said. The curfew now stretches from 1 a.m. to 5 a.m., apart from Fridays, when it begins at 7 p.m.
Mursi's Muslim Brotherhood says the state of emergency has given extra legal cover to a crackdown on the movement: the security forces have killed hundreds of Mursi's supporters and arrested thousands more since his July 3 downfall.
Some 250 members of the security forces have been killed since then, most of them in the lawless Sinai Peninsula where security sources said an officer died in an attack on a police station on Tuesday.
Military chief General Abdel Fattah al-Sisi enjoys the support of many Egyptians but his critics say the new government aims to revive the autocratic ways of the Mubarak era.
The state of emergency and curfew had been due to last a month from August 14, but the government extended it for two more months on September 12.
The draft legislation to regulate demonstrations has been condemned by critics as a danger to the right to protest, a right seen by activists as one of the main achievements of the 2011 uprising against Mubarak, who crushed all public dissent.
Interim President Adly Mansour received the draft from his government on Tuesday and is studying it, his office said. The president has the power to issue legislation in the absence of parliament, which was dissolved after Mursi's ouster.
"They have the discretion to ban every single demonstration," said Heba Morayef, Egypt director for Human Rights Watch, mentioning one of several criticisms of the draft.
Unrest by Mursi supporters has persisted, though the number of demonstrators has dwindled, and there were clashes with security forces at two universities north of Cairo on Tuesday.
In Mansoura, four people were wounded in the clashes that also involved local residents. Witnesses said the opposing camps hurled rocks at each other. The sound of gunshot was also heard but it was unclear who was firing. Police moved in following a request from the head of the university.
Five people were wounded in Zagazig, security sources said.
(Reporting by Yasmine Saleh, Asma AlSharif and Tom Perry; Writing by Tom Perry; Editing by Mark Heinrich and Robin Pomeroy)