US President Barack Obama has strongly condemned the violence in Egypt, and cancelled joint military exercises.
He said co-operation could not continue while civilians were being killed.
Egypt’s interior ministry has now stated that police are authorised to use live ammunition in self-defence.
On Wednesday security forces broke up two camps of Muslim Brotherhood protesters who were demanding President Mohammed Morsi’s reinstatement. More than 500 people were killed nationwide.
The protesters had been staging sit-ins for weeks about the army’s overthrow of Mr Morsi in July.
In the latest violence on Thursday, hundreds of Brotherhood members set fire to a government building near Cairo.
Local TV footage showed firefighters bringing employees out from the building – which housed the offices of the Giza local government.
State-run Nile News TV also reported clashes between Brotherhood members and residents in a suburb of Egypt’s second city, Alexandria.