* Authorities build concrete wall to protect embassy
* Egypt's Islamist president faces tough balancing act
* Mursi condemns film, pledges to protect embassies
* Protester killed in clash with police near embassy
* United States is major aid donor to Egypt
By Edmund Blair and Tamim Elyan
CAIRO, Sept 14 (Reuters) - One protester was killed on Friday as Egyptians angry at a film denigrating the Prophet Mohammad clashed for a third day with police blocking the way to the U.S. Embassy.
The 35-year-old protestor died from bird shot wounds three days after protesters climbed embassy walls and tore down the American flag.
"God is Greatest" and "There is no God but God," one group near the front of the clashes chanted as some threw stones on Friday on a street leading from Tahrir Square to the embassy nearby, as police in riot gear fired off rounds of teargas.
Hundreds of protesters gathered in streets near the mission late into the evening, pelting police with stones and petrol bombs as they were pushed back from the embassy perimeter.
The state news agency said 27 people were injured on Friday. Based on figures it announced on other days, that suggested more than 250 people have been injured since clashes erupted on Wednesday, after Tuesday's breach of the embassy.
Elsewhere, thousands of people joined peaceful protests after Friday prayers in Tahrir and outside mosques in Cairo and other cities, responding to a call by the Muslim Brotherhood, the group that propelled President Mohamed Mursi to power.
In Sinai, militants attacked an international observer base close to the borders of Israel and Gaza, a witness and a security source said. Two Colombian soldiers were wounded, an official from the observer force said.
U.S. Defense Secretary Leon Panetta called his Egyptian counterpart, General Abdel Fattah al-Sisi, on Friday to "underscore the importance of ensuring the safety and security of the U.S. diplomatic mission," Pentagon spokesman George Little said.
"In light of ongoing protests in Egypt, Minister al-Sisi reiterated Egypt's commitment to secure U.S. diplomatic facilities and personnel," Little said.
Many Muslims regard any depiction of the Prophet Mohammad as blasphemous and the low-budget film - produced in California - that portrayed him as a womanizer and religious fake has provoked outrage across the Middle East and led to the storming of several U.S. missions in the region.
Mursi, an Islamist and Egypt's first freely elected leader, has to strike a delicate balance, fulfilling a pledge to protect the embassy of a major aid donor but also delivering a robust line against the film to satisfy his Islamist backers.
Mursi repeated on Friday his condemnation of the film, rejection of violence and promise to protect diplomatic missions in comments in Italy, the second stop of a trip to Europe.
On Thursday, he said he asked U.S. President Barack Obama to act against those seeking to harm relations. His cabinet said Washington was not to blame for the film but urged the United States to take legal action against those insulting religion.
Obama's administration says it had nothing to do with the film but cannot curb the constitutional right to free speech in the United States.
Washington has a large embassy in Cairo, partly because of a vast aid program that began after Egypt signed a peace deal with Israel in 1979. Washington gives $1.3 billion in aid each year to Egypt's army plus additional funds for its government.
Washington, a close ally of Egypt under deposed president Hosni Mubarak, has long been wary of Islamists, only formally opening contacts with the Brotherhood last year, several months after he was forced from power by a popular uprising.
Al-Masry Al-Youm highlighted comments Obama made to a Spanish-language network saying Egypt was neither an enemy nor an ally, underlining the changing ties. "America: Egypt is no longer an ally," the newspaper wrote in a front-page headline.
"Before the police, we were attacked by Obama, and his government, and the Coptic Christians living abroad!" shouted one protester wearing a robe and long beard favoured by some ultra-orthodox Muslims, speaking close to the police cordon.
Egypt's Coptic Orthodox church has condemned what it said were Copts abroad who had financed the film. Many Copts worry about the rise of Islamists and fret about any action that could stoke tensions between the two communities.
Two Islamist preachers in Egypt told worshippers on Friday those who made the film deserved to die under sharia, Islamic law, but said diplomats and police should not be targeted.
Although this could be taken by some Muslims as an edict to take the law into their hands, many Egyptians believe only the prestigious Al-Azhar mosque has the authority to issue decrees.
An Al-Azhar preacher said protests should be peaceful. The state news agency said a team of Al-Azhar officials urged those battling with police to stop.
One banner held aloft by demonstrators read: "It is the duty of all Muslims and Christians to kill Morris Sadek and Sam Bacile and everyone who participated in the film."
The two people named were both linked to the film. Sadek, a Copt living in the United States, told Reuters this week he promoted the film to highlight discrimination against Christians who make up about 10 percent of Egypt's 83 million people.
The violence has angered many Egyptians. One image circulating on Facebook showed a charred car accompanied by the words: "People go to defend the Prophet with petrol bombs and religious insults to the police. They don't pray at noon or in the afternoon. Who are they?"
Though some demonstrators clashing with police near the embassy wore clothes favoured by ultra-orthodox Islamists, most were young men or youths in jeans and T-shirts. Some made it clear they did not back Mursi or have Islamist sentiments.
"Mursi is protecting them and attacking us, he should allow us in," said Mohamed Mustafa, 20, a ceramics worker who voted for a liberal rival of Mursi's in the presidential election.
09/15/2012 10:05 PM EDT
Egypt PM: Some Cairo Protesters Paid To Protest
Egypt's Prime Minister Hesham Kandil told CNN that some people involved in the recent protests at the U.S. Embassy in Cairo were paid to protest. He also said that some were there on their own accord, though.
For more on his comments, click here.
09/15/2012 8:16 PM EDT
Libya President: 'Foreigners' Involved In Attack
Both Libyans and "foreigners" carried out the attack on the U.S. consulate in Libya that killed U.S. Ambassador Chris Stevens, said Libyan President Mohamed Magariaf.
"We have assumptions and we have some information, and all that information we have now leads to the same direction about the perpetrators, the criminals," he told NBC.
For more on Magariaf's comments, click here.
09/15/2012 7:58 PM EDT
More Details Of Libya Attack Emerge
A local security official walked CNN through the horrific attacks in Libya that left U.S. Ambassador Christopher Stevens dead. Read the report here.
09/15/2012 7:32 PM EDT
Senior Libya Official Tells CNN: No Evidence That Attack Was Pre-Planned
@ JomanaCNN :
One senior official just told me they have no evidence yet to support President's statements that attack was pre-planned. #Libya
09/15/2012 7:24 PM EDT
U.S. Issues Warnings For Sudan, Tunisia
From the AP:
WASHINGTON — The State Department on Saturday ordered the departure of all family members and non-essential U.S. government personnel from posts in Sudan and Tunisia and is issuing travel warnings to American citizens in the two countries due to security concerns over anti-American violence.
"Given the security situation in Tunis and Khartoum, the State Department has ordered the departure of all family members and non-emergency personnel from both posts, and issued parallel travel warnings to American citizens," said Victoria Nuland, a department spokeswoman.
To read more, click here.
09/15/2012 7:19 PM EDT
Nakoula Basseley Nakoula
In this image from video provided by CBS2-KCAL9, Nakoula Basseley Nakoula, the man behind the anti-Muslim movie that has inflamed the Middle East, is escorted by Los Angeles County sheriff's deputies from his home, early Saturday, Sept. 15, 2012, in Cerritos, Calif. Nakoula, 55, was interviewed by federal probation officers at a Los Angeles sheriff's station but was not arrested or detained, authorities said early Saturday. (AP Photo/CBS2-KCAL9)
09/15/2012 5:10 PM EDT
Image Purportedly Shows Camp Bastion
This image from AP video obtained from the SITE Intel Group posted by al-Emarah Jihadi Studio, an Afghan Taliban media unit who released two clips on Saturday, Sept. 15, 2012, purports to show smoke rising over Camp Bastion in Helmand Province, Afghanistan, after what the Taliban media unit says is an attack at the base. (AP Photo/SITE Intelligence Group)
09/15/2012 5:03 PM EDT
Far-Right Group Trying To Screen Anti-Islam Film
According to an AFP report, a far-right group in Germany wants to screen 'Innocence of Muslims,' the film that sparked protests around the world, in Berlin.
German Interior Minister Hans-Peter Friedrich told Der Spiegel he would use every legal means at his disposal to stop them.
“Such groups and organizations only want to provoke Germany’s Muslims,” he said, accusing them of recklessly pouring oil on the fire.
Read the full story here.
09/15/2012 4:36 PM EDT
Libyan President Meets U.S. Consulate Guard
President Mohammed el-Megarif, fourth right, meets an unidentified Libyan guard of the U.S. Consulate who was wounded following the deadly attack on September 11, 2012, at Benghazi Medical Center in Benghazi, Libya, Friday, Sept. 14, 2012. (AP Photo)
09/15/2012 4:30 PM EDT
Saudi Arabia's highest religious authority on Saturday condemned the attacks on U.S. embassies as un-Islamic, according to a report by Reuters.
"It is forbidden to punish the innocent for the wicked crimes of the guilty, or to attack those who have been granted protection of their lives and property, or to expose public buildings to fire or destruction," he said in a speech carried by state news agency SPA.
Read the full report here.