Loyalists of deposed Islamist president Mohamed Morsi, overthrown in a July military coup,yesterday tried to converge on a central Cairo square for the anniversary celebrations, when police confronted them.
At least 45 people were killed in Cairo and five south of the capital, while another 268 people were wounded across Egypt, senior health ministry official Ahmed al-Ansari told AFP.
He said that "majority of the deaths were caused by bullets and birdshots," adding that the identities of the dead were being ascertained.
In central Cairo, police fired shots and tear gas to disperse stone-throwing protesters. AFP correspondents saw several suspected demonstrators being arrested and beaten.
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An interior ministry statement said police arrested 423 protesters in Cairo, accusing them of vandalism and "firing live rounds and birdshot".
Three months after Morsi's overthrow, followed by a harsh crackdown on his Muslim Brotherhood movement, the Islamists had planned to galvanise their protest movement in a symbolic attempt to reach Tahrir Square.
Hundreds of thousands of people had filled the square in February 2011 to force president Hosni Mubarak to resign, and again in July 2013 to urge the army to depose his successor Morsi.
But on Sunday, security forces guarded entrances to the square, frisking people arriving for the anniversary celebrations.
Several thousand people, some carrying pictures of army chief Abdel Fattah al-Sisi, waved Egyptian flags as warplanes flew overhead in formation and patriotic songs blared from loudspeakers.
Earlier in Cairo, the air was thick with tear gas and the crackle of gunfire as police confronted several marches heading for Tahrir.
Prime Minister Hazem Beblawi urged Egyptians to unite, saying the country is on the road to recovery.
The Islamist Anti-Coup Alliance called for more protests this week and specifically urged students across Egyptian universities and schools to protest on Tuesday "against these continuing massacres".
Away from the main squares, Cairo's streets were largely deserted on Sunday, a public holiday to commemorate the October War, known as the Yom Kippur War in Israel.