(Adds dropped phrase in 2nd paragraph, details)
WASHINGTON, July 31 (Reuters) - The U.S. State Department urged Egypt's interim government on Wednesday to respect the right of peaceful assembly, after Cairo's new leaders said vigils by supporters of deposed President Mohamed Mursi threatened national security and were no longer acceptable.
"We have continued to urge the interim government, officials and security forces, to respect the right of peaceful assembly," deputy spokeswoman Marie Harf told a news briefing. "That obviously includes sit-ins."
The United States had made this point publicly and privately to Egypt's leaders "and we will continue to do so," Harf said.
Earlier, an interim cabinet installed by the Egyptian military denounced "terrorist acts" and traffic disruption stemming from the street protests and said it had decided to "put an end to them."
This set up a potentially bloody showdown with the Muslim Brotherhood, which has vowed to keep up its street vigils until Mursi is reinstated. (Reporting by Susan Cornwell; Editing by Vicki Allen and Christopher Wilson)