Egyptians were voting on Saturday in a run-off presidential election between an Islamist and ousted leader Hosni Mubarak's last premier amid political chaos highlighted by uncertainty over what powers the winner will have.

Some 50 million Egyptians are eligible to cast ballots in the two-day poll, which sees Ahmed Shafiq vying for the top job against Muslim Brotherhood candidate Mohammed Mursi.

Queues had already formed outside some voting stations before the polls opened at 8:00 am (0600 GMT), with police and army deployed outside, according to AFP reporters.

"I will vote for the one who will guarantee security and safety for our community," said Makram, a Coptic Christian voter, from a polling station in the Shoubra neighbourhood.

Over in Manial, an island in the Nile, a crowd that included veiled and unveiled women waited to cast their ballots.

"I'm voting for Mursi because I don't want Shafiq to win. I'm scared of Mursi but I'm more scared of Shafiq," said Nagwan Gamal, 26, a teaching assistant.

The race has polarised the nation, dividing those who fear a return to the old regime under Shafiq from others who want to keep religion out of politics and fear the Brotherhood would stifle personal freedoms.

It comes against the backdrop of two controversial court rulings on Thursday, allowing Shafiq's candidacy to proceed despite his role in the old regime, and invalidating Egypt's elected parliament.

What many see as a lose-lose proposition has given impetus to the boycott movement, which was largely ignored in the first round, with celebrities and high-profile activists calling on Egyptians to abstain or void their ballot.

Others believed boycotting would waste a historic opportunity.

"Everyone should participate in the election. I don't believe in boycotting," said Diana Adel, 26, in Manial.

"I think it will be fair, and I do think it will be historic because we're choosing a president ourselves," she said.

The winner will be the first freely chosen president in Egypt's history and will succeed Mubarak, who was forced from office by a popular revolt last year and turned power over to the military.

Activists said the court rulings were the final phase of a military coup that takes the democratic transition back to square one.

"Back to where you were," read a huge red headline in the independent daily Al-Shorouk after the Supreme Constitutional Court said certain articles in the law governing parliamentary elections were invalid, annulling the Islamist-led house.

It also ruled unconstitutional the political isolation law, which sought to bar senior members of Mubarak's regime and top members of his now-dissolved party from running for public office for 10 years.

Shafiq had initially been barred from standing, but the electoral commission accepted his appeal last month, permitting his candidacy and referring the case to the court.

On Wednesday, the justice ministry decided to grant army personnel the right to arrest civilians after that power was lifted when a decades-old state of emergency expired on May 31.

SCAF, "the head of the counter-revolution, is adamant to bring back the old regime, and the presidential elections are merely a show," six parties and movements said in a joint statement.

US Secretary of State Hillary Clinton, whose country provides Egypt with $1.3 billion a year in foreign aid, called for a full transfer of power to elected civilians.

"There can be no going back on the democratic transition called for by the Egyptian people," she said in Washington.

The State Department said separately it was "troubled" by the court ruling ordering parliament annulled and was studying its implications.

"We are continuing to monitor the situation in Egypt," spokeswoman Victoria Nuland told reporters.

"If in fact the conclusion is that there need to be new parliamentary elections our hope is that they can happen swiftly and that they reflect the will of the Egyptian people."

Meanwhile, US Secretary of Defence Leon Panetta called Egypt's military ruler, Field Marshal Hussein Tantawi, to stress the "need to move forward expeditiously with Egypt's political transition, including conducting new legislative elections as soon as possible," the Pentagon said.

The two men "agreed on the importance of the US-Egyptian strategic relationship," while Panetta underscored "the need to ensure a full and peaceful transition to democracy."

Panetta also said "he looks forward to working with Egypt's newly elected government to advance our mutual interests," the statement read.

But whoever wins will face the prospect of uniting a sorely divided electorate in an office whose powers have yet to be defined, while dealing with the key challenges of both a flagging economy and deteriorating security.