Welcome to the Guardian's coverage of the Middle East, where there has been violence in Cairo overnight after a Coptic Christian protest march led to violence.

• Funerals are taking place in Cairo for the victims of Egypt's worst violence since Hosni Mubarak was ousted as president. Hundreds of mourners have gathered at the Coptic Cathedral in Abbassia, where there have been chants against the military.

• The official death toll from Sunday's violence stands at 25, with 272 injured, according to Egypt's health ministry. Video showed military vehicles ploughing through crowds of people demonstrating. Many people were said to have been crushed to death by armoured personnel carriers.

• There has been fresh violence in Cairo, with several hundred Christians pelting police with rocks outside the Coptic hospital where many of the Christian casualties of Sunday's violence were taken.

The trouble began when the Cairo demonstration against an attack on a church in southern Egypt was reportedly met by gunfire close to the state television building. Fighting then spread to Tahrir Square and surrounding streets, as hospitals where the wounded were being treated also came under attack.

My colleague Jack Shenker is based in Cairo. From his news story:

State television announced that a curfew was being imposed on the city's downtown area and Tahrir Square, the epicentre of the February uprising that overthrew the former president. The curfew would last from 2am to 7am (midnight to 5am GMT) on Monday. Appealing for calm after more than 1,000 security force personnel were deployed, interim prime minister Essam Sharaf said: "What is taking place are not clashes between Muslims and Christians but attempts to provoke chaos and dissent." "The only beneficiary of these events and acts of violence are the enemies of the January revolution and the enemies of the Egyptian people, both Muslim and Christian" Coptic Christians make up approximately 10% of the Egyptian population, and some have been fearful that Egypt's ongoing political turmoil could allow ultra-conservative Islamists to flex their muscles and inspire a crackdown on social minorities. There has also been criticism of the army for being too lenient on previous attacks against Christians, with many witnesses accusing soldiers of being actively complicit in last night's bloodshed. Egyptian troops are among the dead following the violence, which comes after several outbreaks of sectarian tensions this year "We were marching peacefully," said Talaat Youssef, a 23-year-old Christian trader. "When we got to the state television building, the army started firing live ammunition," he added. Another protester, Essam Khalili, said: "Thugs attacked us and a military vehicle jumped over a sidewalk and ran over at least 10 people," he said.

From my colleague Haroon Siddique's earlier blog: Al-Masry Al-Youm reports that Egypt's Supreme Council of the Armed Forces has ordered the government to form a fact-finding committee to investigate last night's violence.

In a statement on state TV, SCAF, which has been blamed by Coptic Christians as well as Muslim pro-democracy activists for the deaths, said:

All legal measures will be taken against whomever is proven to have incited or been involved in the incidents. The council doesn't want to respond to attempts to create a division between the people and the armed forces, which only aims at destroying the country and hindering democracy.

The White House has called for restraint in Egypt and said the transition to democracy should continue.

"As the Egyptian people shape their future, the United States continues to believe that the rights of minorities - including Copts - must be respected, and that all people have the universal rights of peaceful protest and religious freedom," the White House said in a statement.

"These tragic events should not stand in the way of timely elections and a continued transition to democracy that is peaceful, just and inclusive."

Al-Qaida has confirmed the death of the Yemeni-American terrorist leader Anwar al-Awlaki.

Al-Awlaki was killed in Yemen last month by a missile fired from an American drone, after Barack Obama had authorised his targeting in April 2010. Al-Qaida had not previously acknowledged his death.

In a statement released on Monday al-Qaida's Yemeni wing – Al Qaida in the Arabian Peninsula – said al-Awlaki was killed along with three other people, and pledged retaliation, according to Associated Press.

"The blood of the sheik (al-Awlaki) and his brothers will not go in vain; there are heroes behind him who do not sleep under oppression, and they will retaliate soon," the group said.

"We and the Americans are at war: we get them and they get us, and the end is for those who are patient - they are the ones who will be victorious."

The strike that killed al-Awlaki also killed a second American, Samir Khan, who edited al-Qaida's Internet magazine. AQAP said two other militants were also killed.

From AP:

In its statement Monday, AQAP warned that while the U.S. may have killed al-Awlaki, "it cannot kill his ideas," and that his death "gives new life and revival to his ideas and style." It said that al-Awlaki "has students who he taught and disciples who benefited from him all over the earth, who will follow his steps and his path." US officials believe al-Awlaki became involved in operational planning for AQAP, and Yemeni officials have said al-Awlaki had contacts with Umar Farouk Abdulmutallab, the accused would-be Christmas plane bomber, who was in Yemen in 2009. In New York, the Pakistani-American man who pleaded guilty to the May 2010 Times Square car bombing attempt told interrogators he was "inspired" by al-Awlaki after making contact over the Internet.

The latest violence in Egypt is "a shocking reminder of the potential for deterioration" in the country, my colleague Ian Black writes.

It is hard to imagine a worse blow than the killing of Coptic protesters by members of the security forces, but all too easy to gauge the bitter disappointment as the great hopes of Tahrir Square fade. Far beyond Egypt, the Cairo bloodletting also highlights the uneven progress of the wider Arab spring following the lighting of the spark by an angry and desperate young man who burned himself to death in Tunisia in December 2010. Initial euphoria about an unstoppable domino effect that would topple one Arab autocracy after another has given way to a more nuanced view that looks at specific local factors over a longer period, including the capacity of the old regimes to fight back and hold on. Seasonal metaphors – spring giving way to summer, then to autumn and winter – have also outlived their usefulness. Old assumptions are being re-examined. Westerners need to understand that Islamist groups will be players in post-revolutionary politics in ways that were not possible under the old dictatorships. Tunisia is leading the field, with more than 100 parties competing in landmark free elections later this month and a new constitution in the pipeline. The advantages of having a developed civil society are clear. In contrast, the absence of independent institutions is equally striking in Libya, where regime change would not have happened without Nato's intervention, an intervention that is unlikely to be repeated elsewhere.

The Daily News Egypt reports that Egypt's stock market "lost billions" after Sunday's violence. The country's benchmark index fell 2.25 percent, the news website said, ending the session with a loss of 5.07bn Egyptian pounds – $850.17m.

The EGX 30 closed at 3,938.02 points while the broader EGX 70 fell 1.69 percent and the EGX 100 dropped 1.85 percent. Bourse chairman Mohamed Omran said in a statement that he "understands the concerns of all investors and traders in the stock market regarding the security and political situation [in Egypt]," which weighed on the performance of the market on Monday. He added that stability in the political arena will be "swiftly reflected in the performance of Egypt's capital market." The day's trading session started off with a 5 percent decline, shedding LE 10.2 billion ($1.7 billion) of total market capitalization, which reached LE 302.6 billion ($50 billion), according to an official at the stock exchange. It later recouped some of the losses, ending with a market cap of LE 308 million.

This video, taken from TV coverage, purports to show some of the violence which occurred last night.

Military vehicles can be seen weaving through crowds of protesters who attempt to dodge out of the way.

Egypt's Coptic church has "blasted authorities for allowing repeated attacks on Christians", AP reports.

The spiritual leader of the Coptic Christian minority, Pope Shenouda III, declared three days of mourning, praying and fasting for the victims starting on Tuesday and also presided over funerals for some of the Christians killed. Sunday's sectarian violence was the worst in Egypt since the uprising that ousted Hosni Mubarak in February.

"Strangers got in the middle of our sons and committed mistakes to be blamed on our sons," the Coptic church said in a statement. It lamented "problems that occur repeatedly and go unpunished."

Al-Masry al-Youm, the Egyptian newspaper, reports that some 1500 protesters attended a rally at Coptic hospital in Cairo, chanting anti-army slogans. It adds that "thousands" are now marching from the hospital towards Maspero, the scene of the deaths last night. These reports cannot be verified by the Guardian.

Al-Jazeera is reporting that Egypt's ruling supreme council of the armed forces "has called for a speedy investigation into Sunday night's deadly clashes in the Egyptian capital, Cairo, that left at least 26 dead and more than 300 injured, mostly Coptic Christians".

The SCAF "tasked the government with quickly forming a fact finding committee to determine what happened and take legal measures against all those proven to have been involved, either directly or by incitement," state television reported. At an emergency meeting held on Monday, the military council also reiterated that it "continues to bear national responsibility to protect the people after the January 25 revolution... until it hands power to an elected civilian authority". It blamed the clashes on "efforts by some to destroy the pillars of the state and sow chaos" and said it would "take the necessary measures to restore the security situation".

On Twitter:

@SherineT Thousands marching in funeral procession from Coptic hospital to Abbasiyya Cathedral. Marchers holding hands, peaceful @linawardani #egypt

Eyewitnesses have told the Egyptian al-Masry al-Youm newspaper that the military threw protesters bodies into the Nile last night.

A man in his fifties who identified himself as William told a group of people at the cathedral on Sunday that he was standing in front of the Maspero state TV building, which is next to the Nile, when he saw soldiers dispersing people from around the dead bodies of a number of protesters killed in the violence. "In the beginning, I thought that they were just dispersing people from around the dead bodies, but later I was screaming at them after seeing them carting off the bodies and throwing them into the Nile," William said. William was speaking to journalists and others who had come to attend the protest. Some in the audience agreed, saying they had heard the same story from other eye-witnesses. The reports are unverified as yet, but with an uncertain death toll and what appears to be a misinformation campaign from the state-owned media, the rumor seems to be gaining traction.

Al-Masry al-Youm also reported that @Elmoshir had written on Twitter on Sunday night:

"There were four dead bodies lying in the street. I tried with someone else to carry them away. The army chased us off. After five minutes I saw soldiers throwing the dead bodies in the Nile."

@Elmoshir tweets in Arabic so the claim could not immediately be verified.

Here's an informative Storyful mapping the violence in Cairo, courtesy of Lilian Wagdy, who writes.

Coptic Christians are calling it a massacre. They have declared three days' mourning. And Cairo is as tense as it was at the height of the revolution. Once more the security forces stand accused of murder after unarmed protesters were shot, beaten, and mowed down in the street. Plainclothes thugs have made a return. And once again social media is being used to challenge an official narrative that sought to blame the victims, then pointed the finger abroad.

Egypt's football association says it has informed the Confederation of African Football that it cannot host an Olympic qualifying tournament because of a surge in violence in Cairo.

EFA official Azmy Mejahed told AP that the federation has apologized to CAF after it was told by Egyptian authorities that it could not host the matches because of security concerns.

Egypt had been due to host eight African teams in the 26 November – 10 December tournament, with three qualifying automatically for next year's London Olympics and a fourth team facing a playoff.

Ap said the matches are likely be moved to Algeria.

The UN secretary general, Ban Ki-moon, has called on the Egyptian rulers "to guarantee the protection of human rights and civil liberties for Egyptians of all faiths".

A spokesperson for Ban said that the secretary general was "deeply saddened by the loss of life in Cairo last night".

"He appeals to all Egyptians to remain united and to preserve the spirit of the historic changes of early 2011," the spokesperson said in a statement. "He calls on the transitional authorities to guarantee the protection of human rights and civil liberties for Egyptians of all faiths."

The statement continued:

"The Secretary-General reiterates his call for a transparent, orderly and peaceful transition that meets the legitimate aspirations of the Egyptian people and includes free, fair and credible elections leading to the establishment of civilian rule."

This blog is now finishing for the day. Thanks for reading.

• At least 26 people were killed in clashes between Coptic Christians and police in Cairo on Sunday night, the country's worst violence since the uprising that ousted Hosni Mubarak eight months ago.

• Video showed military vehicles driving at speed into crowds of protesters. Witnesses spoke of people having been driven over by tanks, while others were killed by gunfire.

• The UN secretary general, Ban Ki-moon, has called on Egypt's interim military government "to guarantee the protection of human rights and civil liberties for Egyptians of all faiths".

• The supreme council of the armed forces has launched an investigation "to determine what happened and take legal measures against all those proven to have been involved, either directly or by incitement".