Heavy gunfire was heard on Saturday as Egyptian security forces attempted to storm a mosque near Cairo's Ramses Square where some 700 anti-coup protesters had taken refuge.
The mosque has since been evacuated, with many of the protesters who had barricaded themselves inside arrested.
The hundreds of Morsi supporters had refused to leave the mosque because they feared being attacked by crowds of "thugs" that were outside with security forces.
Reports said that police had dragged several men out of the building, who were then attacked by angry neighborhood residents with sticks and iron bars.
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Waleed Attar was among a group of people who managed to escape the mosque when the gunfire erupted.
"We didn't know where the bullets were coming from," he told Al Jazeera.
"We found our way between vehicles before the thugs could trap us, we ran for fear of being shot. Many of those trapped were being assaulted by thugs. They said we would all be slaughtered."
The Washington Post reported that footage broadcast on state television showed troops exchanging gunfire with men in a minaret of the mosque, and police and military forces said they opened fire only when they were shot at from inside the mosque and from its minarets.
Protesters denied the allegations, however, saying they had no access to the top of the minarets from inside the mosque.