CAIRO — The Muslim Brotherhood nominated its chief strategist and financier Khairat el-Shater on Saturday as its candidate to become Egypt’s first president since Hosni Mubarak, breaking a pledge not to seek the top office and a monopoly on power.


Mr. Shater, 62, a millionaire business tycoon, was a political prisoner until just a year ago. Because of the Brotherhood’s unrivaled grass-roots organization and popular appeal, he is now a presidential front-runner.


He is being nominated at a moment of escalating tension between the Brotherhood and Egypt’s military rulers. The Brotherhood, an Islamist group outlawed under Mr. Mubarak, already dominates the Parliament and the assembly writing a new Constitution. It is now demanding to replace the military-led cabinet and is tussling with the military council over questions like the degree of civilian oversight of the military under the new charter.


His candidacy is likely to unnerve the West and has already outraged Egyptian liberals, who wonder what other pledges of moderation the Brotherhood may abandon.


The Brotherhood’s entry into the race also turns the election into a debate over the future of the Islamist political movement that is sure to resonate in the region. Mr. Shater faces Islamist rivals to his left and right — one a more liberal former Brotherhood leader, the other an ultraconservative Salafist. Indeed, the Brotherhood may have entered the race in part because a strong showing by either rival could undercut the group’s authority as the predominant voice of Islam in Egyptian politics.


Mr. Shater is considered a conservative but a pragmatist. He has argued that Islam demands tolerance and democracy, has championed free trade and open markets and has guided the Brotherhood through its first public commitment to uphold the peace agreement with Israel.


But he also argues for an explicitly Islamic government. And while some in the group have argued that it should tolerate diverse approaches to Islamist politics from its own members, he has helped enforce the authority of the Brotherhood’s executive committee over its members, stirring allegations from liberals that it is undemocratic.


Doubts about the strength of the Brotherhood’s commitment to its promises raise particular concerns in the United States and Israel, which considered the Mubarak government’s commitment to the peace agreement a linchpin of regional stability.


An Israeli official, speaking on condition of anonymity, declined to comment specifically on Mr. Shater, but called the nomination worrisome. “Obviously this is not good news,” the official said. “The Muslim Brotherhood is no friend of Israel’s. They do not wish us well.” The official added: “The big question will be how pragmatic they will be once in power. It could go in either direction.”


In Washington, the State Department declined to comment. But many American officials who have met with Mr. Shater on visits to Cairo, including top State Department officials and Congressional delegations, have praised his moderation, business savvy and effectiveness.


At a news conference announcing the nomination, officials of the Brotherhood and its political arm insisted they were forced to offer a candidate because of the urgent needs left by more than a year of military-led transitional government. They alluded to a mounting economic crisis as well as unspecified “threats to the revolution.”


“We decided that Egypt now needs a candidate from us to bear this responsibility,” said Mohamed el-Morsi, president the Brotherhood’s Freedom and Justice Party. “We have no desire at all to monopolize power.”


Mr. Shater was not present at the news conference. Instead, the Brotherhood’s supreme guide, Mohamed Badie, read a letter from Mr. Shater resigning his post as deputy supreme guide to run for president. “Although I never thought of occupying any executive position in the state or running for it, I can’t help but comply with the decision of the group,” Mr. Shater wrote, according to Mr. Badie.