By Tom Perry and Asma Alsharif
CAIRO (Reuters) - Egyptians voted on Tuesday for the first time since the military toppled president Mohamed Mursi on a draft constitution that may set the stage for a presidential bid by army chief General Abdel Fattah al-Sisi.
At least five people were killed in confrontations between Muslim Brotherhood supporters and police, according to official sources, highlighting underlying tension in the country. A small bomb went off in Cairo, injuring no one.
The Brotherhood, backing Mursi who is now in prison, has called for a boycott and protests over the draft which deletes Islamist language written into the basic law approved a year ago under Mursi. It also strengthens state institutions that defied him: the army, the police and the judiciary.
The stock market has rallied in anticipation of a more stable political order. It crossed its January 2011 peak on Tuesday - a fresh three-year high and its fourth straight gain.
The referendum is a milestone in the political transition plan the army-backed government has been implementing while pressing a fierce crackdown on the Muslim Brotherhood, Egypt's best organised party until last year.
A presidential election could follow as soon as April.
Echoing a view widely held in Egypt, a senior European diplomat said Sisi would probably announce his candidacy in the next few days - a prospect that will delight supporters but could stir more conflict with his Islamist opponents.
With little or no sign of a campaign against the draft - one moderately Islamist party says its activists were arrested while campaigning for a no-vote - it is expected to pass easily, backed by many Egyptians who staged mass protests on June 30 against Mursi and the Brotherhood before his removal.
"We are here for two reasons: to eradicate the Brotherhood and take our rights in the constitution," said Gamal Zeinhom, a 54-year old voter standing in line at a Cairo polling station.
Others cited a desire to bring stability to Egypt after three years of turmoil ignited by the historic uprising that felled veteran autocrat President Hosni Mubarak in 2011.
Sisi ousted Mursi, Egypt's first freely elected head of state, in July. His Islamist opponents say he is the mastermind of a coup that kindled the worst internal strife in Egypt's modern history and revived an oppressive police state.
But after a failed experiment with democracy, many are weary of the upheaval that has gripped this nation of 85 million and shattered its economy. They view Sisi, 59, as someone who can stabilise the country.
Sisi inspected a polling station after voting began, dressed in desert coloured fatigues and wearing his trademark dark sunglasses. The two-day vote ends on Wednesday.
"We've had no stability for three years. It's chaos. We are going out to choose something better for our country," said Nayer al-Masri, 35, a telecom engineer waiting to vote in the Zamalek residential district.
A Sisi presidency would mark a return to the days when the post was controlled by army men - a pattern broken by Mursi's one year in office.
Brotherhood supporters staged protests in at least four cities. The bloodiest clashes were in Sohag, south of Cairo, where conflicting accounts of what happened emerged.
Local officials, speaking on condition of anonymity, said four Brotherhood supporters were killed and more than 20 wounded, in addition to three policemen.
But the Interior Ministry said Brotherhood supporters had killed four people and wounded nine more, including a police officer, when they opened fire on passersby to stop them reaching polling stations, the state news agency reported.
The International Commission of Jurists (ICJ), a Geneva-based group that works to uphold the rule of law, described the draft constitution as highly flawed.
"The referendum campaign has taken place within a context of fear, intimidation and repression, calling into question the fairness of the entire process," it said in a statement.
The government has escalated its crackdown on the Brotherhood in recent weeks, declaring it a terrorist organisation on December 25. Al Qaeda-inspired militants have stepped up attacks on security forces since Mursi's ouster.
While the government has linked the attacks to the Brotherhood, the group has repeatedly said it is a non-violent movement committed to peaceful resistance to the state.
But the security clampdown - hundreds of Islamists have been killed and thousands arrested - has taken the steam out of protests while fuelling anger among young Islamists. Mursi and other Brotherhood leaders have been arrested and are on trial.
Underlining how the political picture has changed since then, the former head of state had asked for permission to vote in the referendum, his lawyer, Fareed El Deeb, said.
While Western states have criticised the crackdown and called for inclusive politics, they have put little pressure on Cairo. Egypt, which controls the Suez Canal, has been a cornerstone of U.S. policy in the Middle East since the 1970s, when it became the first Arab state to make peace with Israel.
The government has been supported by Gulf Arab states hostile to the Brotherhood. They jumped to Egypt's rescue after Mursi's overthrow, offering billions of dollars in aid.