Egyptian authorities have authorised police to use deadly force to protect themselves and key state institutions from attacks.

"The interior ministry has instructed all forces to use live ammunition to counter any attacks on government buildings or forces," the ministry said in a statement on Thursday.

The announcement comes after hundreds of supporters of deposed President Mohamed Morsi attacked the local government offices in Giza and set them ablaze. Protesters have attacked police stations and other official buildings across the country over the past two days.

There were also reports of clashes in Ma'adi, a neighbourhood in southern Cairo, between local residents and Morsi supporters, with witnesses saying both sides exchanged gunfire.

In a separate statement, the cabinet accused Morsi's Muslim Brotherhood of committing acts of "terrorism and vandalism".

Security forces violently cleared two pro-Morsi sit-ins on Wednesday, killing hundreds of people and ending their nearly seven-week-old protest.

The Health Ministry said that 525 people were killed in the clearings and subsequent clashes across the country, and more than 3,500 injured.

Officials from Morsi's Muslim Brotherhood have said the true death toll was far higher, with a spokesman saying 2,000 people had been killed in the "massacre."

It was impossible to verify the figures independently given the extent of the violence.

'Emotions too high'

"After the blows and arrests and killings that we are facing, emotions are too high to be guided by anyone," said Gehad el-Haddad, a spokesman for the Muslim Brotherhood, adding that anger within the movement was "beyond control".

Hundreds of bodies were packed into a Cairo mosque on Thursday which had been pressed into service as a makeshift morgue.

Witnesses said most of the dead were killed by gunfire, many of them shot in the dead. Volunteers poured cold water and ice over the bodies to keep them from rotting in the harsh summer heat.

Families had hoped to bury their dead on Thursday, but several of them said they were unable to acquire the proper permits. The Health Ministry wanted them to accept death certificates that said their relatives committed suicide, they said.

The army-backed interim government has defended the crackdown, saying authorities had no choice but to act.

Authorities imposed an evening curfew on Wednesday, and also declared a state of emergency, which will last for one month. The latter gives security forces the power to detain people indefinitely.

International condemnation of the violence continued to pour in. US President Barack Obama said on Thursday that he "strongly condemned" the violence, and announced that the US was cancelling a biennial military exercise with Egypt, scheduled to be held next month.