There was no immediate official confirmation of the deaths at Rabaa al-Adawiya, where thousands of Mursi supporters who have been gathered for six weeks awoke to an army operation and police helicopters circling the site.
One witness said he saw 15 bodies at a field hospital beside the camp where bulldozers cleared the protesters' tents.
"It is nasty inside, they are destroying our tents. We can't breathe inside and many people are in hospital," Murad Ahmed told a Reuters correspondent on the edge of the sprawling camp, where Muslim Brotherhood guards had positioned sandbags in anticipation of a police raid.
The state news agency said security forces had started implementing a phased plan to disperse the protesters, which is almost certain to deepen political turmoil in Egypt.
On the other side of Cairo, smoke could be seen rising above the Nahda protest camp after security forces moved in to disperse protesters.
More than 300 people have already died in political violence since the army overthrew Mursi on July 3, including dozens of his supporters killed by security forces in two separate earlier incidents.
Mursi became Egypt's first freely elected leader in June 2012 but failed to tackle deep economic malaise and worried many Egyptians.
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