(Updates with Egypt summoning the Qatari ambassador)
DUBAI, Jan 4 (Reuters) - Qatar said on Saturday a decision by Egypt to designate the Muslim Brotherhood a terrorist group was "a prelude to a shoot-to-kill policy" against demonstrators.
Qatar was a firm supporter of Egypt's former Islamist President Mohamed Mursi and ties with Cairo have deteriorated since the army deposed him in July following mass protests against his year-long rule.
Egypt accuses Qatar and its Doha-based Al Jazeera television channel of backing the Muslim Brotherhood, which it declared a terrorist organisation on Dec. 25. Thousands of its members have been arrested.
Qatar's ambassador to Cairo, Saif Moqadam Al-Boenain, has been summoned to the Foreign Ministry, spokesman to Egypt's Foreign Ministry Badr Abdelatty said without giving details.
A Qatari Foreign Ministry statement said: "The decision to designate popular political movements as terrorist organisations, and labeling peaceful demonstrations as terrorism, did not succeed in stopping the peaceful protests.
"It was only a prelude to a shoot-to-kill policy on demonstrators," the statement published by state news agency QNA said. It said that "inclusive dialogue" between all sides was the only solution to Egypt's crisis.
On Friday, 17 people were shot dead as supporters of the Brotherhood clashed with police across Egypt, defying a widening state crackdown on the movement that ruled the country until six months ago.
Islamists opposed to the army's overthrow of Mursi have been holding daily demonstrations for months.
Last week, Egypt's general prosecutor detained several journalists for 15 days for broadcasting graphics on Al Jazeera, alleging that they damaged Egypt's reputation.
In an interview with Egypt's newspaper Al-Masry Al-Youm in November, Foreign Minister Nabil Fahmi said Al Jazeera was one of the reasons for worsening ties between the two states.
"There must be a stance taken with regard to any interference in Egypt's internal affairs, not forgiving those who overstep its rights," he said when asked if Cairo might sanction Doha as it did Ankara last year.
Egypt expelled the Turkish ambassador in November after it accused Ankara of backing organisations bent on undermining the country - an apparent reference to the Brotherhood.
A conservative estimate puts the death toll since Mursi's fall at well over 1,500 people, mainly Brotherhood supporters. About 400 police and soldiers have been killed in bombings and shootings. (Writing by Rania El Gamal; additional reporting by Asma Alsharif in Cairo; editing by Ralph Boulton)