CAIRO, Egypt -- The wife of Egypt's ousted President Mohammed Morsi told thousands of his supporters Thursday to remain defiant in the face of the military-backed government's warnings that security forces will clear the ongoing protests, promising her husband "is coming back, God willing."

Naglaa Mahmoud made her first appearance since the July 3 military coup, which followed mass rallies demanding her husband's removal from office. He's been held by military authorities since then. Showing up on the first day of the Muslim holiday of Eid el-Fitr, marking the end of Ramadan, appeared aimed at galvanizing support after the group fell from power after just one year of Morsi's rule.

Wearing a flowing veil that covered most of her body, Mahmoud spoke to the crowds gathered at a sit-in at Rabaah al-Adawiya mosque in Cairo's Nasr City suburb. She recited a verse from Qur'an before delivering what she described as "good news," saying Egypt "is Islamic."

"We are victorious," Mahmoud told the crowd, saying protesters would overcome.

Initially, the Egyptian press suggested that Mahmoud was held with her husband in undisclosed location along with one of her children. Demonstrators at Nasr City cheered her arrival to the makeshift stage. She did not say where she had been since the coup.

Morsi is held with his top aides, a number of whom have been transferred over the past days to a prison in southern Cairo. They face charges including instigating violence in various incidents that led to deadly street violence over one-year-rule of Morsi.

Morsi's children also have joined the Nasr City protest camp and called for release of their father.

The protest camp is the site of one of two sit-ins by Morsi's Muslim Brotherhood group and its allies. Protesters demand Morsi's reinstatement, restoration of the suspended constitution drafted under Morsi and the return of Morsi's Islamist-dominated legislative council which was also disbanded.

Egypt's interim leaders and the military say they'll stick with a fast-track transition plan that calls for elections by early next year.

Critics believe that the Brotherhood-- one of the country's oldest religious and political groups -- is rejecting any meditation with the new government to spark a possibly bloody confrontation with the security forces. The Brotherhood publicly says the government has offered nothing as they don't want to restore Morsi to power.

Mohammed Aboul-Ghar, the leader of Egyptian Socialist Democratic party whose members hold key positions in the new government, said that the Brotherhood is holding ground in hopes that a crackdown could win them public sympathy.

"The Muslim Brotherhood are political animals," he said. "They are preparing for a comeback to power through ballot boxes. The way back is through winning support when bloodshed among its ranks turns the public against the Egyptian leadership."

Foreign diplomats and Arab foreign ministries have tried to mediate a peaceful resolution between the two sides. However, the recent visit by U.S. Sens. John McCain and Lindsey Graham sparked outrage when they called for the release of "political prisoners" in reference to Brotherhood leaders now charged with instigating violence. The senators also called Morsi's ouster a coup, while Kerry has described the military's move as "restoring democracy."

Walied el-Masry, one of the founders of the youth campaign Tamarod -- which spearheaded a petition demanding Morsi step down -- called the comments by American and European confusing.

"They have no clear position," el-Masry said. "We are not interested in pleasing them. What we care most about is the Egyptian people."

The interim government concluded on Wednesday that all diplomatic efforts have failed and that it will clear the sit-ins. Prime Minister Hazem el-Beblawi has described the decision to clear the sit-ins "final and irreversible."

On Thursday, el-Beblawi told Egyptian state-run television that the government will take action to protect its citizens.

"We are trying to find a balance between the need to bring back security and fight outlaws and @ the same time give to those who have refused to co-operate so far the opportunity" to do so, he said.

It appears that any state crackdown will wait until next week. The Cabinet statement said the government was keen not to take action during the celebrations that mark the end of Ramadan, which started Thursday and continue for four days. Authorities talked earlier about using gradual measures to end the protests, such as besieging the sit-ins to prevent people from getting in while allowing them to leave.

On the first day of Eid el-Fitr, the Rabaah el-Adawiya protest camp took on a festival-like atmosphere. Organizers set up playgrounds for children and coffee shops in the middle of a sea of tents and blankets spread across the street to house thousands of protesters. A couple even got married before the crowd.

However, men in helmets and sticks still kept watch as sand-bag and brick walls stood on the perimeter of the protest.

Mahmoud Abyad, a Brotherhood protester who has been camping at the mosque since June 28, said that he expects a government crackdown to happen "soon."

"But we are not afraid. ... People are here to defend their country and to defend Islam," Abyad said.