CAIRO—Hundreds of Muslim Brotherhood supporters gathered at a Cairo mosque late Thursday in defiance of a national curfew even as the regime gave its forces live ammunition and the authorization to use it.

The preparations position the opposing forces for a Friday showdown, just two days after clashes left more than 600 people dead. Neither side is backing down as the standoff hardens between supporters of Mohammed Morsi, Egypt's first popularly elected Islamist president, and Egypt's military, which removed Mr. Morsi with...