* Death toll rises to 12, 232 injured
* Violence is fresh test for Egypt's military rulers
* Military courts to try those arrested
(Adds cabinet statement, detail from burned church, new clash)
By Sarah Mikhail
CAIRO, May 8 (Reuters) - Egypt's government announced measures to curb religious violence on Sunday after 12 people died in clashes in a Cairo suburb sparked by rumours that Christians had abducted a woman who converted to Islam.
The fighting on Saturday was Egypt's worst interfaith strife since 13 people died on March 9 after a church was burned, and it threw down a new challenge for generals ruling the country since the overthrow of President Hosni Mubarak in February.
Prime Minister Essam Sharaf cancelled a tour of Gulf Arab states to chair a cabinet meeting where the government decided to deploy more security near religious sites and toughen laws criminalising attacks on places of worship.
"Gatherings around places of worship will be banned to protect their sanctity and ensure the security of residents and prevent sectarian strife," Justice Minister Mohamed el-Guindy said in a statement read on state television.
The army said that 190 people would be tried in military courts over Saturday's violence.
Tension was high and the army cordoned off streets near the Saint Mina church, where about 500 conservative Salafist Muslims massed on Saturday to call on Christians to hand over the woman.
Violence broke out as more people converged on the church. Both sides traded gunfire, firebombs and stones, witnesses said.
Soldiers and police fired shots in the air and used teargas to separate the sides but stone-throwing went on into the night.
A power cut plunged the neighbourhood into darkness, making it harder for the security forces to quell the violence.
Another church nearby, Saint Mary's, was badly burned. One witness said thugs started the fire at Saint Mary's and that the Salafists had tried to stop them.
The arson did not stop a congregation from holding Sunday Mass in the church, under burned-out paintings of saints and walls covered with soot. Prayer benches and books also were consumed in the fire.
Worshippers wept during the service as they prayed for the souls of the victims. A Muslim woman in a headscarf approached a priest and embraced him in a show of solidarity.
Accounts of how the fighting began and who stoked the violence remained confused, leading to heated arguments in the working class neighbourhood's narrow streets on Sunday.
"God knows if the story of this convert girl is true or rumours but, regardless, she does not add to Islam or reduce Christianity," said Dina Mohamed, a housewife living near Saint Mary's.
"Why are we focused on such matters when we are in a country that can barely stand on its feet?"
As bulldozers cleared away the debris at Saint Mary's on Sunday, an argument broke out between a group of Muslims and Christians in front of the church, attracting a bigger crowd. Security forces fired shots in the air and the crowd dispersed.
"My son attends mass at this church. How can we ever feel safe?" said Nashaat Boshra, who stood crying in front of Saint Mary's. "This is religious strife facilitated by the army and police. Let's just face the truth."
Egypt's highest religious authority, Al-Azhar, held an emergency meeting to discuss the clashes, and the Grand Mufti called for a conference of national reconciliation. The governor of Giza province, where the church is situated, said relatives of the dead and injured would receive financial compensation.
Injured Muslims and Christians being treated in hospital showed reporters small holes that looked like shotgun wounds. State media said 12 died and 232 were wounded. Medical sources said 65 of the injured were shot.
Later on Sunday, hundreds of young Christian men ran through central Cairo towards the main state television building calling for the removal of Field Marshal Mohamed Hussein Tantawi, who leads the military council ruling Egypt.
A crowd of Muslim men met them and some sought to calm the Christians' anger but fights broke out and the two groups pelted each other with stones.
"I think the army is in a state of confusion," said Gamal Eid, a prominent author and human rights activist. "It is afraid to take serious action against extremists so as not to be accused of suppressing these movements."
Lawyer Peter el-Naggar, a Christian, blamed the clashes on Salafists seeking the support of more moderate Muslims.
"They want to gain the sympathy of the Egyptian Muslims and they think that by doing what they are doing, they would reach this goal and gain political ground," Naggar said.
Sectarian strife often flares in Egypt over conversions, family disputes and the construction of churches. Muslims and Christians made demonstrations of unity during the protests that overthrew Mubarak, but interfaith tensions have grown.
Some Christians said security forces had been too slow to disperse the crowd in front of Saint Mina and looked on as tension got out of hand. Christians make up about 10 percent of Egypt's 80 million population.
Secular Egyptians have also voiced unease at what they see as a lax approach to Salafists violence since Mubarak's ouster.
Hundreds gathered in Alexandria to call for religious unity and punishment for those who took part in Saturday's violence.
"They must strike with an iron fist against anyone who has killed an Egyptian, regardless of their religion or political orientation," said Christian college student Mina Gergis, 22.
(Additional reporting by Yasmine Saleh, Dina Zayed, Abdelrahman Youssef and Amr Dalsh; Writing by Tom Pfeiffer and Sami Aboudi; Editing by Michael Roddy)