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* State media says 16 injured in clashes near embassy

* Mursi condemns Prophet insult, vows to protect foreigners

* President in Brussels, EU says to help embattled economy

(Adds Obama, Clinton comments)

By Edmund Blair and Marwa Awad

CAIRO, Sept 13 (Reuters) – Egypt’s president said on

Thursday he supported peaceful protest but not attacks on

embassies after Egyptians angry at a film deemed insulting to

the Prophet Mohammad climbed into the U.S. embassy in Cairo and

tore down the American flag.

Highlighting the challenge facing President Mohamed Mursi,

protesters threw stones at police blocking their approach to the

fortress-like embassy near Tahrir Square, even as his televised

address was broadcast on Thursday. Police fired tear gas back.

Hundreds of demonstrators had gathered in the area, but a

smaller group of those joined battles with police. The Health

Ministry said 70 people were injured, according to the state

news agency, and 23 people were detained.

Many Muslims believe depicting the Prophet is blasphemous.

In the past, cases where the Prophet was insulted have stirred

condemnation and protests across the Islamic world.

“Expressing opinion, freedom to protest and announcing

positions is guaranteed, but without assaulting private or

public property, diplomatic missions or embassies,” said Mursi,

an Islamist who is Egypt’s first freely elected president.

He pledged to protect foreigners in Egypt, a comment he

repeated during a news conference in Brussels where he was

making his first European trip to build ties with European Union

states and secure support for Egypt’s embattled economy.

The EU offered Egypt macro-economic aid of 500 million euros

($644.4 million) and between 150 million and 200 million euros

for economic recovery.

The U.S. embassy assault will test Mursi’s handling of ties

with the West and particularly the United States, a close ally

of Egypt under ousted President Hosni Mubarak and which has long

been wary of Islamists. Washington is a major aid donor to

Cairo. Mubarak was toppled in popular protests last year.

U.S. President Barack Obama told a Spanish-language network

that Egypt’s Islamist-led government should not be considered a

U.S. ally “but we don’t consider them an enemy.” U.S. Secretary

of State Hillary Clinton said the film was “disgusting” and that

the U.S. government had nothing to do with it.

Mursi also needs to strike a balance by addressing the anger

over a film that portrayed the Prophet as a philanderer and

religious fake, enraging Muslims across the region.

CALL FOR U.S. ACTION

The U.S. ambassador to Libya and three other staff were

killed when the U.S. consulate in Benghazi was attacked on

Tuesday. Since then, police have fired tear gas at protesters in

Tunisia and demonstrators stormed the U.S. mission in Yemen.

“All of us Egyptians reject any form of attack or insult to

the Prophet,” Mursi said, while offering his condolences over

the killing of the U.S. ambassador and diplomats in Libya.

Mursi said he had spoken to U.S. President Barack Obama on

Thursday. “I affirmed to him the need for deterrent legal

measures against those who want to damage relations between

peoples, and particularly between the people of Egypt and the

people of America,” he said.

In another statement, Mursi said he expects “assurances from

the U.S. government to prevent any infringement on the sacred.”

At least one of the promoters of the film “Innocence of

Muslims” is an Egyptian Coptic Christian who lives in America.

Clips of the film have circulated on the Internet for weeks.

Clashes with police flared on Wednesday and protesters

continued hurling rocks and dodging teargas canisters on

Thursday. A Reuters witness said some carried petrol bombs in

overnight scuffles. Several police vehicles were torched.

Interior Minister Ahmed Gamal el-Din visited the scene, the

state news agency reported.

The U.S. embassy in Cairo was closed for public business

again on Thursday. In a security message on its website, the

embassy urged U.S. citizens in Egypt to be vigilant and said

they should “avoid areas where large gatherings may occur”.

The U.S. embassy is close to Tahrir, the cauldron of the

anti-Mubarak protests and scene of many protests since. Streets

around the square have often become battlegrounds with police.

MIXTURE OF PROTESTERS

Washington has a big mission in Egypt, partly because of a

huge aid programme that followed Egypt’s signing of a peace

treaty with Israel in 1979. The United States gives $1.3 billion

to Egypt’s military each year and offers the nation other aid.

The demonstrators were a mixed crowd. Some were angry at the

police for barring the way to the embassy. A few were Christians

who turned up in solidarity with Muslim compatriots. Others said

their main goal was to demonstrate against police repression.

The earlier protest included many backers of ultra-orthodox

Islamist groups but there was little sign of them on Thursday.

“We came here because of the insult to the Prophet,” said

Farag Ragheb, 26, clutching stones and fleeing a gas plume. “We

were next to the American embassy in a peaceful protest and the

police intervened. Don’t we have the right to protest?”

The scene was similar to other street battles, though less

intense, since Mubarak fell. “They are just the same as before,”

shouted one young man, pointing to the police cordon.

“We are all revolutionaries and here because of repression

of the police,” said 25-year-old Yahya, who had stripped off his

T-shirt to wrap round his face to protect himself from tear gas.

He added: “The Prophet is more important than anything.”

A few who were asked said they had seen clips of the film.

Several said they had not seen it and did not know its name.

Some said it would be wrong to watch the film at all.

The Coptic Orthodox church and Egypt’s highest seat of

Islamist learning, Al-Azhar, have both condemned the film.

($1 = 0.7759 euros)

(Additional reporting by Shaimaa Fayed, Tamim Elyan, Mohamed

Abdellah and Omar Fahmy in Cairo and Charlie Dunmore in

Brussels; Writing by Edmund Blair; Editing by Mark Heinrich)