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A polarised Egypt is facing the most critical phase of its post-revolutionary life after Egypt's army ousted the country's elected president, Mohamed Morsi, and scheduled fresh elections in a what was labelled by the presidency as a "full coup".

The chief of the armed forces, General Abdel-Fatah al-Sisi, announced that he had suspended the constitution and would nominate the head of the constitutional court, Adli Mansour, as interim president on Thursday. Both presidential and parliamentary elections would follow shortly afterwards and a transitional cabinet would be named.

A statement on the ex-president's Twitter and Facebook accounts labelled the military move a "full coup", after Morsi was officially deposed from office at 7pm.

In the early evening, a presidential aide told the Guardian that Morsi was still free, but late on Wednesday night a Muslim Brotherhood spokesman said Morsi was being held by the authorities in an unknown location.

A security official said the head of the Muslim Brotherhood's political party and the Brotherhood's deputy chief had been arrested. State media said authorities had issued arrest warrants for 300 other Brotherhood members.

"We will build an Egyptian society that is strong and stable that will not exclude any one of its sons," said Sisi, who strove to paint the coup as the fulfilment of the popular will, following days of vast protests against Morsi's rule.

He spoke of his "historic responsibility" in front of a panel of Egyptians representing what was intended to be full spectrum of Egyptian life, including the Coptic pope, the country's most senior Muslim cleric, and leading secular politician Mohamed ElBaradei.

Symbolically, the panel also included a representative of the Tamarod campaign, the mass movement that inspired the millions-strong protests on Sunday that prompted Morsi's departure.

Sisi's televised statement was met by rapturous applause and a spectacular fireworks display at the centre of the anti-Morsi revolt in Cairo's Tahrir Square. The streets of downtown Cairo became a raucous carnival that lasted into the small hours, with many waving flags, blasting horns, and dancing. One or two could be seen drinking in the same streets that four days ago were jammed with frustrated drivers queuing for hours for petrol.

But five miles in east Cairo, the mood could not have differed more. A rally of Morsi supporters booed Sisi's speech, chanting "Down with military rule" - in scenes that epitomised Egypt's divisions. While secular Egyptians blame Morsi for autocratic policies that have failed to build consensus, Islamists are furious that Egypt's first democratically elected president should have been deposed after just a year in office. Fireworks burst over opponents of Egypt's Islamist President Mohammed Morsi in Tahrir Square in Cairo, Egypt, Tuesday, July 2, 2013.

Sisi's statement came several hours after his ultimatum for Morsi to solve the political crisis had passed without agreement. The delay confused all parties, who wondered whether a coup would actually take place. But the creeping presence of the military who set up barricades in parts of the capital where pro-Morsi supporters had gathered, followed by the release of a strongly-worded statement by Morsi's national security adviser, Essam Haddad, seemed to confirm to both camps that the military was taking a new role in post-revolutionary Egypt. "For the sake of Egypt and for historical accuracy, let's call what is happening by its real name: military coup," said Haddad.

The momentous events capped a harrowing week for Morsi and his key support base, the Muslim Brotherhood, which had won the presidency in a democratic election held a year ago. Morsi's support had been steadily whittled away over the past four days, first being abandoned by the military, then the powerful police force, and yesterday the state media.

Earlier in the week, police failed to intervene after the headquarters of the Muslim Brotherhood in east Cairo was besieged for 12 hours and later burnt down. Yesterday, the interior ministry, which runs the police force, confirmed it was backing the military.

While many on the street saw Morsi's removal as the continuation of Egypt's 2011 revolution, the ex-president's Islamist allies viewed it as a coup, and a betrayal of democracy. Thousands of Morsi supporters gathered in the streets to back him, many fearing that his departure would mark a return to the repressive treatment of Islamists under Mubarak.

Last night, the army shut down five Islamist TV channels, while there was factional fighting in Alexandria. State media said last night that three people had been killed in Alexandria. Police also raided the offices of the pan-Arab TV network al-Jazeera in Cairo. Opponents of Egypt's Islamist leader Mohammed Morsi celebrate outside the presidential palace in Cairo. Opponents of Egypt's Islamist leader Mohammed Morsi celebrate outside the presidential palace in Cairo. Photograph: Hassan Ammar/AP

Sisi had spent much of of Wednesday locked in meetings with his key generals and with senior religious and opposition figures, including the opposition leader Mohamed ElBaradei, the country's leading Sunni cleric, Sheikh Ahmed Tayeb, and the Coptic pope, Tawadros II. He did not meet Morsi, but had spent four hours with him on Tuesday discussing a power-sharing plan.

The opposition has long maintained that Morsi was never interested in consensus. But in recent days, Morsi repeatedly claimed he was willing to share power with his opponents and, after Sisi's deadline had passed, again reiterated that he would agree to a national unity government and parliamentary elections within months. But Haddad, Morsi's chief aide, made clear that the president was in the process of being ousted, and warned of its dire consequences.

"Today only one thing matters," he wrote in a dramatic Facebook post that he noted would probably be his last in office. "In this day and age no military coup can succeed in the face of sizeable popular force without considerable bloodshed. Who among you is ready to shoulder that blame?" He added: "There are still people in Egypt who believe in their right to make a democratic choice. Hundreds of thousands of them have gathered in support of democracy and the presidency. And they will not leave in the face of this attack.

"To move them, there will have to be violence. It will either come from the army, the police, or the hired mercenaries. Either way there will be considerable bloodshed. And the message will resonate throughout the Muslim world loud and clear: democracy is not for Muslims."

The gradual nature of Sisi's actions seemed to confirm the army's desire to be seen to be answering the will of the people, rather than enacting a unilateral coup. Link to video: Egypt's top general announces Morsi has been deposed

Events indicated a rehabilitation of not just the army - whose chequered 15-month tenure in office between February 2011 and June 2012 prompted unprecedented criticism of the military - but the police, whose reputation took a battering in the aftermath of the 2011 uprising. The police piggybacked on the popularity of the protests, releasing two statements backing the protests against the president.

Islamists saw Morsi's removal as a betrayal of democracy. But for many in Tahrir it was a victory for people power. Opposition to Morsi had floundered until the founding of the Tamarod campaign in April. But the leaderless Tamarod, which gathered millions of signatures calling for Morsi's removal in recent weeks, built momentum for 30 June's street protests, setting the stage for Morsi's departure.

On Wednesday evening Barack Obama urged Egypt's military to hand back control to a democratic, civilian government without delay, but stopped short of calling Morsi's ouster a coup. In a carefully worded statement, Obama said he was "deeply concerned" by the military's move to topple Morsi's government and suspend Egypt's constitution. He said he was ordering the US government to assess what the military's actions meant for US foreign aid to Egypt $1.5bn a year in military and economic assistance.