CAIRO, Nov 7 (Reuters) - A hardline Egyptian Islamist group has said it will rally in defiance of a new law designed to regulate protests that the government is expected to pass next week.

The interim government is studying the draft law and is expected to ratify it next week before a state of emergency, imposed by the army after it ousted Islamist President Mohamed Mursi on July 3, expires on Nov. 14. International rights groups say it will effectively ban demonstrations.

"We will protest against the law as soon as soon as it is ratified and we will be on the lookout," said Alaa Abu al-Nasr, secretary general of Islamist group al-Gamaa al-Islamiya's political wing, the Building and Development Party.

"This is a law to replace the state of emergency because they can not live without oppressive laws that restrict freedom," state newspaper al-Ahram quoted him as saying.

Al-Gamaa al-Islamiya, an ally of Mursi's Muslim Brotherhood, was once an armed group, blamed for the murder of at least 58 tourists in an attack in Luxor in 1997. The group later gave up violence.

Since Mursi's ouster, the authorities have repeatedly used force to break up demonstrations by Islamists. Many hundreds of people have been killed in the violence.

Street protests have been a strong driver for government change in Egypt. In 2011, mass demonstrations led to the end of President Hosni Mubarak's three decades in power. Over a year later the army, prompted by mass protests, overthrew Mursi, the country's first democratically elected leader. (Reporting by Asma Alsharif; Editing by Mark Trevelyan)