Pope Francis has called for an end to the violence amid reports police have used live ammunition on protesters, and called for differences to be "resolved peacefully and with a sense of responsibility."

The police crackdown on demonstrators and curbs on some media in the past few days have fuelled broader criticism of Ortega, who has gradually tightened his hold on the country's institutions since he returned to power over 11 years ago.

Lissett Guido, a Red Cross spokeswoman, said there were seven confirmed deaths and that the number would likely rise. The government had reported "almost 10" by late on Friday.

Marlin Sierra, director of human rights organisation CENIDH, said it had logged 25 deaths, mostly caused by firearms and rubber bullets. That number could not be independently verified. Most of the dead were aged between 15 and 34, she said.

Videos and photos posted on Nicaraguan media showed people standing ready to defend their stores, while others formed lines to stock up on gasoline and food in case of shortages.

Nicaragua has been one of the more stable countries in Central America, largely avoiding the turmoil caused by gang violence or political upheaval that has at times plagued Honduras, El Salvador and Guatemala in recent years.

But top Nicaraguan business lobby COSEP has backed peaceful protests against the government, and said it would not enter talks with Ortega to review the social security plan until he had ended police repression and restored freedom of expression.

A former Marxist guerrilla and Cold War antagonist of the United States, Ortega has presided over a period of stable growth with a blend of socialist policies and capitalism.

But critics accuse Ortega and his wife, Vice President Rosario Murillo, of trying to establish a family dictatorship. The country remains one of the poorest in the Americas.

On Sunday night, local time, Ortega was forced to cancel the planned welfare overhaul.

“The previous resolution of April 16, 2018, which was the resolution that kicked off this whole situation, is being revoked, canceled, put aside,” Ortega said adding talks would be held to draft a new plan to strengthen the social security system.

Ortega was a driving force in the overthrow of one of Latin America's most notorious regimes when his Sandinistas ended the Somoza dynasty's long rule of the country in 1979.

He was elected president in 1984, but a civil war, which pitted the Sandinistas against US backed right wing Contra rebels, hurt his popularity, and he was voted out in 1990.

Not until a 2006 election did Ortega reclaim the presidency.

Now 72, he has maintained an uneasy relationship with the United States, toning down his Cold War rhetoric but forging close ties with US adversaries such as the late Venezuelan leader Hugo Chavez and his successor Nicolas Maduro.

The US State Department has called for "broad-based dialogue" to end the latest dispute and "restore respect" for human rights, urging the government to let the media operate freely.

"We condemn the violence and the excessive force used by police and others against civilians who are exercising their ... right to freedom of expression and assembly," State Department spokeswoman Heather Nauert said in statement.