There was no violent confrontation despite the tensions surrounding the determination of Islamist President Mohammed Mursi to press ahead with a Saturday referendum on a controversial new constitution drafted by a panel dominated by his Islamist allies.
The protesters pulled apart a high metal gate bar by bar and toppled concrete blocks with chains.
Hundreds of soldiers who had erected the barrier at the weekend, to block access roads following deadly clashes in the area last week, fell back closer to the palace. Six tanks were stationed close to the walled compound.
A counter-demonstration by Mursi supporters was taking place a few kilometers away, raising fears of further clashes.
Earlier Tuesday Morning at least nine people were hurt when gunmen fired at protesters camping in Cairo's Tahrir Square. Police cars surrounded the square, the first time they had appeared in the area since November 23.
The attackers, some masked, also threw petrol bombs which started a small fire, witnesses said. Security officials say it is unclear who was behind the pre-dawn attack Tuesday.
Many of the protesters, awakened by the noise, chanted: "The people want the downfall of the regime."
On Wednesday last week, pro- and anti-Mursi demonstrators fought each other with metal bars, petrol bombs and handguns, leaving seven people dead and more than 600 injured.
Mursi on Monday ordered the army to use temporary police powers to protect the palace and other "vital state institutions."
The military, which is trying to remain neutral in Egypt's three-week-old political crisis, has vowed to carry out its duty to maintain stability within democratic rules.
The opposition, made up of secular, left-wing and liberal groups, sees the draft text as weakening human rights, the rights of women and religious minorities.
Egyptian human rights groups issued a statement saying the draft constitution "opens the door to the establishment of a theocratic system similar to the Iranian 'Velayat-e Faqih' model," or rule by a clerical supreme leader.
The UN human rights chief and international watchdogs have criticized the draft charter and the way it was drawn up.
Mursi's supporters, however, argue that it is now up to Egypt's voters to decide in the referendum.
On Monday, after a meeting with Morsi, Egypt's defense minister and commander of the armed forces, General Abel-Fattah al-Sisi, called on army officers to exercise the "highest levels of self-restraint."
He said the armed forces were determined to "carry out their role in protecting the nation and its stability regardless of pressures and challenges."
The prolonged crisis has intensified uncertainty over Egypt's economy triggered by the revolution early last year that overthrew autocratic president Hosni Mubarak.
(AFP, Reuters, AP)
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