The Muslim Brotherhood declared on Monday that its candidate, Mohammed Morsi, had won Egypt's presidential election.

If the claim is true, it would be the first victory of an Islamist as head of state in the wave of Middle East protests in the past year.

But the Egyptian military handed itself the lion's share of power, sharpening the possibility of confrontation.

With parliament dissolved and martial law in force, the generals made themselves Egypt's caretakers, gave themselves control over the budget and will determine who writes the constitution.

But as they claimed victory over Hosni Mubarak's last prime minister, Ahmed Shafiq, the brotherhood challenged the military's power grab.

It warned that it did not recognise the dissolution of parliament or the military's interim constitution - or the generals' abrogation of the right to oversee the drafting of a new one.

That pointed to the likelihood of a struggle over spheres of authority between Egypt's two strongest forces.

The brotherhood has campaigned on a platform of bringing Egypt closer to Islamic rule, but the military's grip puts it in a position to block that. A conflict would probably centre on more basic questions about power.

In a victory speech at his campaign headquarters, Morsi clearly sought to assuage fears that the brotherhood will try to impose stricter Islamic law.

"Thank God, who guided the people of Egypt to this right path, the path of freedom and democracy," the bearded, 60-year-old US-educated engineer declared. He promised to be a president to, and servant of, all Egyptians, Muslims and Christians, and to seek a "civil, democratic, constitutional and modern state". He mentioned churches and Christians several times; seldom Islam or Muslims.

Final results of the poll are not expected before Thursday.

The brotherhood's declaration was based on results announced by election officials at individual counting centres. The brotherhood's early, partial counts proved generally accurate in last month's first-round vote.

The group said Morsi took 51.8% of the vote to Shafiq's 48.1%.

There was no immediate comment from the Shafiq campaign.

The question now is how a brotherhood president will get along with the military.

Militants fired on an Israeli crew building a barrier on the Egyptian border yesterday, killing one of the workers, and Israeli soldiers shot dead two of the infiltrators, the military said.

The incident raised Israeli concern about increasing lawlessness in Egypt's Sinai Desert since the fall of Mubarak in 2011.