Many people complained that authorities were preventing them from obtaining permits to bury their dead, although the Muslim Brotherhood announced that several funerals had been held Thursday for victims who had been identified. Fathallah denied that permits were being withheld.
Omar Houzien, a volunteer helping families search for their loved ones, said the bodies were carried to the mosque from a medical center at the protest camp in the final hours of Wednesday's police sweep because of fears that they would be burned.
Elsewhere, a mass funeral was held in Cairo for some of the 43 security troops who authorities said were killed in Wednesday's clashes. Interior Minister Mohammed Ibrahim, who is in charge of the police, led the mourners. A police band played solemn music as red fire engines bore the coffins draped in white, red and black Egyptian flags in a funeral procession.
Morsi's Muslim Brotherhood put the casualty toll at a staggering 2,600 killed and around 10,000 injured, but the figures appeared high in light of footage by regional and local TV networks, as well as The Associated Press.
The deadly crackdown drew widespread condemnation from the Muslim world and the West.
Obama canceled joint U.S.-Egypt military exercises scheduled for next month, although he gave no indication that the U.S. planned to cut off its $1.3 billion in annual military aid to the country. The U.S. administration has avoided declaring Morsi's ouster a coup, which would force it to suspend the military aid.
"While we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back,'' he said, speaking from his weeklong vacation in Massachusetts.
Obama said the United States informed Egypt's interim leaders Thursday morning about plans to cancel the military exercises. The president also ordered his national security team to "assess the actions taken by the interim government and further steps that we may take as necessary with respect to the U.S.-Egyptian relationship.''
The Bright Star maneuvers, long a centerpiece of the deep ties between the U.S. and Egyptian militaries, were scheduled to have lasted about three weeks. Several other countries, including Turkey, Jordan and Britain, have also participated.