* Supporters of deposed president Mursi defiant
* No army move yet against protest camp
* Diplomats fear violent weekend
By Shadia Nasralla
CAIRO, Aug 9 (Reuters) - Supporters of ousted Egyptian President Mohamed Mursi defied government warnings to end their protests on Friday, heightening international concern that a violent confrontation was imminent.
Hundreds gathered for Friday prayers at the Rabaa al-Adawiya mosque in northeast Cairo, which has become a virtual fortress surrounded by barricades of sandbags and bricks.
"Kill as you like. We will not move from here," the preacher told the packed crowd. "This is a revolution. You who are present will make the decision on whether you will disperse."
The Rabaa camp is the likely flashpoint of the political crisis brought on by the military overthrow of the Islamist Mursi and setting up of an interim government five weeks ago.
Security forces in the Arab world's most populous country have warned the protesters they should leave peacefully or face action.
An undeclared truce seems to have taken over the Eid al-Fitr holiday, which celebrates the completion of the Muslim fasting month of Ramadan and ends on Sunday. Some Egyptians felt the security forces would not to attack before then as it would be sacriligious.
But a diplomat from a European country said his country was very concerned about the likelihood of violence this weekend.
"It's a dangerous situation. There is a concern that things could turn serious on Saturday and Sunday," he told Reuters.
Mursi took power as Egypt's first democratically elected president in June 2012. But fears he was trying to set up an Islamist autocracy and his failure to ease economic hardships led to mass street demonstrations which triggered the army move.
The crisis reached a dangerous new phase following the collapse this week of an international effort to bridge the gap between the two sides and avert bloodshed. Mursi and other leaders of his Moslem Brotherhood remain in prison.
At Rabaa, groups of men armed with sticks guarded the camp entrance. One man, a 43-year-old employment agent named Mohamed, said they would defend their position until Mursi was restored
"We are not afraid because we are right. We are all martyrs in the making. Those who rape the rights of the people are the losers. We are not terrorised by tanks and bullets," he said.
Despite the brave words, the weapons on display would prove little match for the security forces. The government says, however, that the Muslim Brotherhood is heavily armed.
Almost 300 people have been killed in political violence since the overthrow, including dozens of Mursi supporters shot dead by security forces in two incidents.
Diplomats say any settlement would have to involve a dignified exit for Mursi, Brotherhood acceptance of the new situation, the release of political prisoners arrested since the takeover, and a future political role for the Brotherhood.
So far, the Brotherhood has refused to accept what it calls the illegal coup and has publicly demanded Mursi's return.
French Foreign Minister Laurent Fabius spoke on Thursday with various Egyptian players, a government spokesman in Paris said. "He underlined the need for each side to favour dialogue and seek compromise rather than fuel tensions or incite violence," the spokesman said.
The European diplomat said the Egyptian army was under enormous pressure from the hardliners among them and from part of the populace to take harsh action against the Brotherhood.
On the Brotherhood side, some too advocated a tough stand.
"They have people among them who are ready to go to the limit," the diplomat said.
(Additional reporting by Catherine Bremer in Paris, Writing by Angus MacSwan, editing by Mark Heinrich)