By Tamim Elyan

CAIRO, June 21 (Reuters) - Public frustration has deepened in Egypt after ruling generals acted to retain sweeping powers over the nation, yet a bigger worry for many exhausted Egyptians is that a new political crisis raises the prospect of fresh turmoil on their streets.

A troubled transition beset by political bickering and often bloodshed has worn down a country that was euphoric when Hosni Mubarak bowed to the will of the people who turned out in their millions in towns and cities to demand he end his 30-year rule.

More than 16 months after he fell and after a run-off presidential vote last weekend whose result has yet to be declared, Egyptians still cannot be sure when the ruling generals will go back to their barracks.

But what many are clear about is that dialogue rather than demonstrations is what the country desperately needs to restore stability and secure their demands.

"We haven't seen politicians taking care of services to citizens. They should sit together and talk," said Adeeb Ashry, 54, who was a casualty of Egypt's economic turmoil when he lost his job as an accountant at a pharmaceutical firm. "Instead of protesting, it would be better if we attend to work," he said.

That doesn't mean he is any less angry with the army council which last week ordered the new parliament dissolved based on a court ruling, sweeping away one of the only substantive gains of the revolt, and issued a decree that gives it legislative powers and puts strict limits on the new president's remit.

With a new parliamentary election not due before November, that undermines their pledge to hand power over by July 1.

"It is as if they are grabbing us by our hair and mopping the floor with us," said Ashry. Yet he also cautioned against a hasty response: "Political groups should assess their strength before any showdown with the military."

Politicians and activists are still reeling from the army's moves that many described as a "military coup".

Yet, while the generals have shifted the political goal posts, activists say the street has proved one of the few channels for protesters to drag concessions from the army.

For example, activists say it was no accident the authorities announced the decision to try Mubarak last year over the killing of protesters days before a big protest was called, even though the army insists the case was a judicial matter.

Having claimed the street after it was marked as off limits by Mubarak's heavy handed police, activists will not give it up. But they admit it is tougher now to galvanise the weary masses.

"It's only the politicised and members of political groups who protest," said Tarek al-Khouly, a leader of the April 6 youth movement which stoked the anti-Mubarak revolt, recalling how much easier it was back then to draw demonstrators out.

That may in part be because the straightforward goal of the early days, namely getting Mubarak to quit, has given way to more nuanced and often more divisive demands for the public to weigh -- such as what the constitution should look like or what powers the president should have.

That doesn't mean the street may not flare up again, but for now there appears less momentum. "If we review the past year and a half, we find the public mood is unpredictable. It's very hard to measure," said Khouly.

No issue could be more divisive than the presidential vote that pitted the Muslim Brotherhood's Mohamed Morsy against Ahmed Shafik, a former military man like Mubarak and briefly the former president's last prime minister. Both claim victory but the election committee has yet to declare who won as it sifts through allegations of fraud levelled by both sides.

"Two presidents are fighting for the presidency, and us citizens in the middle, pulled and torn. What is this?" said 70-year-old Ahmed Abdel Fattah, voicing the exasperation of many.

"It won't pass peacefully," warned a store owner in Cairo's commercial neighbourhood of Ataba who didn't want his name published. "Politicians are stirring up everything."

Many worry that a Shafik victory would again ignite the street, drawing anger from those who toppled Mubarak and cannot bear to see him replaced by a man they view as a carbon copy.

But, for now, the streets are generally calmer and violence has flared far less frequently in recent months. The most recent outbreak of clashes was in May during a protest demanding an end to army rule that was staged outside Cairo's Defence Ministry.

For father of three Ahmed Ali, who lives near the Abbasiya area where that violence erupted, Egypt desperately needs stability to get the battered economy back on track.

"I am nervous and uncomfortable," said Ali, a government employee. "Those who are not well-off are struggling, we don't need clashes now. We want talks and for protests to remain peaceful." (Additional reporting by Shaimaa Fayed; Editing by Edmund Blair)


Loading Slideshow...
  • Supporters of Mohamed Morsi, the Muslim Brotherhood's presidential candidate, protest against Egypts military rulers in Tahrir Square on June 21, 2012 in Cairo, Egypt. (Photo by Daniel Berehulak /Getty Images)

  • An Egyptian vendor sells bread as supporters of the Muslim Brotherhood take part in a demonstration in Cairo's Tahrir square, on June 21, 2012. (MARWAN NAAMANI/AFP/GettyImages)

  • An Egyptian boy throws sewage water in a bucket on his friend during a protest, not pictured, in Tahrir Square, Cairo, Egypt, Thursday, 21 June, 2012. (AP Photo/Manu Brabo)

  • An Egyptian street vendor waits for customers during a Muslim Brotherhood's anti-ruling military council demonstration in Tahrir Square, Cairo, Egypt Wednesday, June 20, 2012. (AP Photo/Nasser Nasser)

  • An Egyptian street vendor carries a poster with a picture depicting presidential candidate Ahmed Shafiq with Arabic that reads "Ahmed Shafiq says: I will remove the verses of Quran from the curriculum" during a Muslim Brotherhood's anti-ruling military council demonstration in Tahrir Square, Cairo, Egypt Wednesday, June 20, 2012. (AP Photo/Nasser Nasser)

  • Egyptian Muslim Brotherhood supporters build a tent in Tahrir Square, Cairo, Egypt, Thursday, 21 June, 2012. (AP Photo/Manu Brabo)

  • Egyptians pray in Tahrir Square, Cairo, Egypt, Thursday, June 21, 2012. (AP Photo/Mohammed Abu Zaid)

  • An Egyptian man chats anti-Supreme Council for the Armed Forces (SCAF) slogans in Tahrir Square, Cairo, Egypt, Thursday, 21 June, 2012. (AP Photo/Manu Brabo)

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