CAIRO, Egypt (ABC News) -- The Egyptian Army is carrying out a "full military coup" and the army has placed a travel ban on the country's embattled President Mohamed Morsi, officials said.
The action came at the end of the 48 hours Egypt's military gave Morsi two days ago to answer the demands of protesters who have filled the country's streets in recent days.
The streets of Cairo was jammed again today, this time with competing throngs of pro- and anti-Morsi protesters.
In a statement posted on the Egyptian Presidency Facebook page, Essam El-Haddad, Egypt's national security adviser called the on-going situation "a full military coup," and warned that it will only lead to more violence.
"Today only one thing matters. In this day and age no military coup can succeed in the face of sizeable popular force without considerable bloodshed. Who among you is ready to shoulder that blame?" he wrote.
"There are still people in Egypt who believe in their right to make a democratic choice. Hundreds of thousands of them have gathered in support of democracy and the presidency. And they will not leave in the face of this attack. To move them, there will have to be violence. It will either come from the army, the police, or the hired mercenaries. Either way there will be considerable bloodshed. And the message will resonate throughout the Muslim World loud and clear: democracy is not for Muslims," El-Haddad wrote.
Scenes in Egypt have been reminiscent of Egypt's "Arab Spring" more than two years ago, which overthrew dictator Hosni Mubarak. Hundreds of thousands of Egyptians have again taken to the streets over the last few days, protesting Morsi's rule after one year in office and demanding that he step down. While most of the protests have been peaceful, there have been incidents of violence. At least 35 people have been killed, many during a gun battle at Cairo University on Tuesday night.
The military issued a statement two days ago warning Morsi that he must do something about the unrest or it will take action, setting up a showdown between the country's first democratically elected president and the powerful military.
On Tuesday, Morsi gave a defiant statement in response, vowing that any attempt by the army to take over would "lead to civil war." He said he would not step down, even if it cost him his life.
"If the price for safeguarding legitimacy is my blood, then I am prepared to sacrifice my blood for the cause of safety and legitimacy of this homeland," he told the country. "Do not be fooled. Do not fall into the trap. Do not abandon this legitimacy. I am the guardian of this legitimacy."
As the clock began ticking the Obama administration scrambled to respond to the growing conflict. From Tanzania on Tuesday, President Obama called Morsi and urged him to take steps to contain the situation, reminding the Egyptian president that while the United States is committed to the democratic process in Egypt, competency must play a role.
"Democracy is about more than elections; it is also about ensuring that the voices of all Egyptians are heard and represented by their government, including the many Egyptians demonstrating throughout the country," said a statement released by the White House reading out Obama's call with Morsi.
Secretary of State John Kerry, who has just returned from a Mideast trip, also placed a call to Egypt's Foreign Minister Mohamed Kamel Amir, who reportedly resigned from Morsi's cabinet on Tuesday.
Defense Secretary Chuck Hagel has also spoken to his counterpart in Egypt, Pentagon spokesman George Little confirms.
The U.S. gives Egypt $1.3 billion in military aid annually. United States foreign aid law states that, in general, the U.S. cannot give direct military funding to any country that is being run by a military government, particularly after a coup has overthrown a democratically elected leader. But the cut in funding is not automatic.
There is room for exceptions, which then allow the administration to take circumstances of the situation into account to determine continued funding.
Little told reporters today that the administration would not speculate on whether aid will be cut in light of the Egyptian military's actions.
"We're still in a period where speculation probably isn't prudent. We need to walk very carefully through this situation," he said. "This is a crisis that involves the Egyptian people and the focus should be on them and their focal process and what decisions they make in the coming hours and days."
The Obama administration has stressed that it will not take sides in the conflict, but the United States is caught between supporting a military it continues to enjoy close ties with that provides security to Egypt and to the region, and supporting Egypt's democratic process with a government that has been seen as largely ineffective and increasingly dictatorial.