Egyptian army chief Field Marshal Abdel Fattah al-Sisi will keep his post as defence minister in a new government, an official source said on Wednesday, quashing speculation he was about to announce a widely expected bid for the presidency.

Sisi is tipped to win the upcoming presidential election but has yet to announce his candidacy. He must vacate the post of defence minister in order to run. The source said he would likely keep that job until an election law is finalised.

"He is expected to continue in his post until all the issues regarding the election laws are resolved," the source said.

Prime Minister Hazem el-Beblawi's government resigned on Monday in a surprise move that has not been clearly explained. Many of Beblawi's ministers were reappointed on Wednesday by Prime Minister-designate Ibrahim Mahlab, the outgoing housing minister who was asked on Tuesday to form the new cabinet.

They included Interior Minister Mohamed Ibrahim, a leading figure in state efforts to fight militant attacks that have soared since the army deposed Islamist President Mohamed Mursi last July following mass protests against his rule.

Ibrahim survived an assassination attempt last September.

Sisi, 59, is widely seen as the most powerful figure in the army-backed administration installed after Mursi's removal.

He enjoys strong support among Egyptians who were glad to see the overthrow of Mursi, who was freely elected president in 2012. But to Mursi's Islamist supporters, he is the mastermind of a coup that led to a bloody state crackdown.

Mahlab said on Tuesday that fighting militant attacks would be a priority for his government. Shootings and bombings, mostly targeting the security forces, have become commonplace since Mursi's removal.

Pointing to the wider risks, an Egyptian court sentenced 26 people to death on Wednesday for plotting attacks on ships passing through the Suez Canal - a vital artery of world shipping. The defendants were tried in absentia.

MINISTERS OF OIL, PLANNING ALSO STAY ON

Mahlab, a former official in deposed President Hosni Mubarak's National Democratic Party, also reappointed Oil Minister Sherif Ismail and Planning Minister Ashraf al-Arabi.

There was no immediate word on who would take the ministries of finance or foreign affairs.

Mahlab is a civil engineer who formerly headed one of Egypt's biggest construction firms.

Hisham Zaazou, tourism minister in the Beblawi government, also kept his position. Tourism is one of the most important industries in Egypt but has been hammered in the last three years of turmoil.

Mounir Fakhri Abdel Nour, minister of trade and industry in the Beblawi government, was appointed minister of a consolidated ministry merging trade and investment.

Cabinet sources said at least 14 of the ministers who served in Beblawi's 36-member cabinet would stay on. Four of the ministerial posts were either canceled or merged into other portfolios. – Reuters