At least 51 supporters of ousted Egyptian President Mohammed Morsi were killed outside a military facility and nearby mosque in Cairo, according to the Egyptian ministry of health.
Two police and one army officer were also killed in the clashes.
The ministry added that more than 430 people have been injured.
Accounts vary as to what exactly happened.
The military contends that "an armed terrorist group" affiliated with the Muslim Brotherhood tried to storm the Republican Guard headquarters, where Morsi is believed to be held, with live ammunition and firebombs shortly after dawn.
Here's what Mohamed Saber el-Sebaei, who was praying outside the Republican Guard facility before suffering a head wound, told Patrick Kingsley of The Guardian:
There were dawn prayers and then I heard someone calling for help, so the imam finished the prayers quickly. Just before we finished, the shooting started. The army units that were standing in front of the Republican Guards' headquarters first started shooting tear gas, then live ammunition above people's heads.
The administration of Egypt interim president Adli Mansour sided with the military, saying the incident resulted from an attempt to storm the Republican Guard headquarters.
Tweets from reporters on the ground give a further sense of the conflicting reports.
Egyptian massacre: two witnesses say the attack began at dawn prayer, the Islamists protestors were unarmed, ran in panic
— David D. Kirkpatrick (@kirkpatricknyt) July 8, 2013
All of those interviewed were clear that the shooting started as the protesters' mass dawn prayers were coming to a close.
— Patrick Kingsley (@PatrickKingsley) July 8, 2013
Everyone, including doctors, had the same story at the sit-in firing started during dawn prayers,live ammo, birdshot &tear gas used #egypt
— Bel Trew - بل ترو (@Beltrew) July 8, 2013
Couldn't find sympathy for MB anywhere. Everyone outside of Rabaa I've talked to doesn't believe Army fired on peaceful protesters
— Kristen Chick (@kristenchick) July 8, 2013
The event could lead to a major escalation in an already unstable situation.
Morsi's Freedom and Justice Party has already called for an "uprising" based on the incident, and the ultraconservative Islamist Al Nour party said it is suspending its participation in efforts to form an interim government.
Russian President Vladimir Putin said that Egypt is on the verge of civil war.
The incident occurred near the Rabaa al-Adawiya mosque, where Morsi supporters have been gathering for massive demonstrations and are staging an ongoing sit-in.
Paddy Allen of The Guardian points to this map showing the proximity of Rabaa al-Adawiya mosque to the Republican Guard HQ along with the location of Tahrir square:
View Cairo Republican Guard HQ in a larger map
The Republican Guard, the senior-most corps in the Egyptian Army and one of its largest divisional commands, is an armored division with the main responsibility of defending the Capital of the Republic (mainly the major government and strategic industrial institutions).
Al-Jazeera posted this video purportedly showing tear gas being fired at Morsi supporters.
These videos, which are graphic, also shows the shooting's aftermath.
This happened on Friday: MAYHEM IN EGYPT: 17 Dead, More than 200 Injured As Morsi Supporters Rally To Reject 'Coup'