CAIRO, June 25 (Reuters) - Egyptian police have arrested eight people over the killing of five Shi'ite Muslims in a Cairo suburb, state media said on Tuesday, after footage of the attack spread on the Internet, heightening fears of sectarian violence.

The lynching of the Shi'ites occurred in the tense run-up to the first anniversary of Mohamed Mursi's election as president on June 30, with the opposition promising mass protests against him and the army warning both sides it will step in if need be.

The suspects are accused of killing the five, who had come to Cairo for a religious festival, and mutilating their bodies by dragging them through the streets.

Previously authorities in the majority Sunni Muslim nation had announced four dead, but the prosecutor's office reported a fifth killed in the incident, state newspaper al-Ahram reported.

Mursi has condemned the crime, but his liberal opponents accuse him and his Muslim Brotherhood of allowing ultra-conservative Salafi allies to whip up anti-Shi'ite sentiment in return for their support. Mursi was guest of honour at a recent rally at which a cleric described Shi'ites as heretics.

Shi'ites form a small minority of Egypt's 84 million people and keep a low profile. The war in Syria, which pits mostly Sunni rebels against President Bashar al-Assad and his Shi'ite allies, has envenomed sectarian feelings across the region.

Iran's foreign ministry condemned the killing on Monday, saying it contradicted Islam. (Reporting By Shadia Nasralla; Editing by Alistair Lyon)