23,000 textile workers in northern Egypt are demanding higher wages.
According to the Associated Press, tens of thousands of workers are on strike after they said the factory manager reneged on his promise to award them a bonus of a month and a half salary.
The strike brought production at the state-owned Misr Spinning and Weaving company to a halt, the AP wrote.
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Reuters reported the factory, located in Mahalla, was the site of a number of protests and riots in 2008 "widely regarded as a catalyst for the revolt that ended the rule of Hosni Mubarak last year."
The strike could test the resolve of newly elected Islamist president Mohamed Morsi as he strives to form a cabinet to replace the army-backed administration.
The AP reported that several hundred people were staging a sit-in inside the company.
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The strike comes as US Secretary of State Hillary Clinton's visited Egypt and reopened the US Consulate in Alexandria, according to Reuters.