By Yasmine Saleh and Michael Georgy
CAIRO (Reuters) - Egypt's army chief, who orchestrated the ouster of Islamist president Mohamed Mursi in July, should not run for the leadership in elections due to be held next year, the head of the biggest liberal party told Reuters.
General Abdel Fattah al-Sisi has said in an interview with an Egyptian newspaper that now was the wrong time to raise the issue of whether he would stand for the presidency.
But he did not rule out taking part in any contest, and speculation has been rising that the former military intelligence officer under toppled autocrat Hosni Mubarak could contest the vote.
"I don't think this is advisable and I don't think it would be a good thing for Sisi and the country that Sisi runs for the presidency," said Sayed El-Masry, head of the Al Dostour Party which is a major part of the country's main leftist and liberal coalition, the National Salvation Front.
"He is doing the country the best favor he can do from his position as a military chief," Masry said in an interview. "Sisi's nomination will give the wrong image to the world that what happened was a coup."
Sisi has said that he stepped in to remove Mursi in response to mass protests against the former leader's rule, which millions of Egyptians complained had pursued an overtly Islamist agenda and mismanaged the country's economy.
Mursi's supporters, many of them members of his Muslim Brotherhood movement, dismiss the intervention as a coup against Egypt's first freely elected president.
Egyptian security forces have killed hundreds of Brotherhood supporters in violent protests that have swept the most populous Arab nation. Hundreds of members, including Mursi, have been detained and the movement has been outlawed.
More than 100 members of Egypt's security forces have also been killed since Mursi's ouster on July 3, many of them in the Sinai Peninsula bordering Israel and the Palestinian Gaza Strip.
Along the western edge of Sinai runs the Suez Canal, a waterway that is key to world trade and has also come under attack in recent months.
SISI POSTERS ADORN BUILDINGS
Masry said the military did not stage a takeover, but was responding to popular demands to remove Mursi and restore security to U.S. ally Egypt.
"This transition is the present arrangement but should be as short as possible to take us back to democracy."
Sisi would likely win if he ran for office, analysts said, pointing to his broad popularity in Egypt. Posters of Sisi, 58, who is also defense minister and deputy prime minister, hang on buildings across the country.
Sisi and other officials have repeatedly said they would not oppose the Brotherhood rejoining politics, but recent moves against the movement suggest otherwise.
"The Muslim Brotherhood, like it or not, want it or not, is present on the ground and will stay for a long period," said Masry.
"It is better they join the legitimate path for change or else there is a chance that the most violent and extremist groups like al Qaeda will tell them: 'didn't we tell you there is nothing called democracy? There is no way but by weapons'."
Masry said he was particularly concerned that Sinai could turn into a new base for al Qaeda if the army did not step up operations to counter an insurgency that has escalated there since Mursi was toppled.
Al Qaeda-linked militants in Sinai have launched a series of attacks on Egyptian police and soldiers across the country, one of which, a failed suicide bombing, targeted the interior minister in Cairo.
"My main worry is Sinai," said Masry, a career diplomat.
He said Egypt needed to review a 1979 peace treaty with Israel, which limits its military deployments in Sinai, in order to secure a permanent troop presence there.
Foreign and Egyptian militants, who possess assault rifles, rocket-propelled grenades and Grad missiles stage attacks nearly every day.
"Sinai could turn into a new base for al Qaeda. The current arrangements give an open invitation for anyone to come from anywhere and do what they want," said Masry.
Political turmoil has gripped Egypt since the downfall of Mursi, whose Brotherhood is the country's biggest and most organized Islamist group.
Officials in the army-backed government have blamed the insurgency in Sinai on the Brotherhood, saying the movement incites violence. The crackdown on the Brotherhood has raised concerns that members will go underground and turn to violence.
(Additional reporting by Patrick Werr; editing by Mike Collett-White)