Egypt's military-backed interim government says 250 Muslim Brotherhood supporters are being investigated for serious charges during rallies in support of ousted President Mohammed Morsi.
A government spokesperson says the Islamist group's return to power in elections last year was "impossible" and the government is considering making the group illegal.
Reuters reports that the move would force the group underground and could lead to a broad crackdown.
The announcement came after security forces cleared a Cairo mosque following a day-long stand-off with Muslim Brotherhood supporters barricaded inside.
The stand-off at the al-Fateh mosque lasted many hours with eyewitnesses reporting heavy gunfire and the use of teargas, the BBC reports.
Television pictures show security forces firing at the mosque's minaret. State media also reported that people were shooting from the building.
Many of the protesters are reported to have been arrested.
The violence follows several days of bloody clashes in Cairo and other cities. Egypt's interior ministry says 173 people died in clashes throughout the country on Friday, bringing the death toll from four days of carnage to almost 800.
