Japan's government is expected to announce Thursday a new virus state of emergency running throughout the Olympics, raising the prospect of a Games with few or even no spectators.
The emergency measures are far looser than the harsh lockdowns seen in some parts of the world, largely limiting alcohol sales and forcing restaurants to close early.
But they will also cap attendance at large events, a key issue with just two weeks until the pandemic-postponed Games open on July 23.
"The number of new cases continues to rise in Tokyo," Japan's minister in charge of the virus response Yasutoshi Nishimura said Thursday.
"As the movement of people increases, the more infectious Delta variant now accounts for around 30 percent of cases. This is expected to expand further," he added.
The proposed emergency, which will be made official later Thursday, will run until August 22 and will set a 5,000 spectator cap, or 50 percent venue capacity, whichever is less, Nishimura said.
Alcohol will be banned at bars and restaurants, which will have to close by 8pm, and events such as concerts and conferences will have to end by 9pm.
"We hope to contain the spread of infections by placing Tokyo under a state of emergency," he said, warning that hospitalisations were rising among people in their forties and fifties.
While Japan has so far experienced a relatively small virus outbreak, with around 14,900 deaths despite avoiding harsh lockdowns, its vaccination programme has moved comparatively slowly.
Just over 15 percent of the population is fully vaccinated so far, and there are concerns that the more infectious Delta variant could produce a new wave that might quickly overwhelm local medical resources.
– Meeting on spectators –
The decision comes with Olympic organisers scrambling to make a final call on how many spectators, if any, can be in the stands at events.
Overseas fans have already been barred from attending, and organisers last month said they would limit local spectators to 10,000 people or 50 percent venue capacity.
But they have acknowledged that the figure might be further reduced, saying the Games could even be held behind closed doors, if the virus situation worsened and tougher restrictions were imposed in Tokyo.
Ticketholders for oversubscribed events were supposed to find out on Tuesday whether they would still have seats after a lottery to thin the crowds.
But in a sign of the continued wrangling on the issue, those results have now been pushed back until Saturday.
Tokyo 2020 organisers are expected to meet on Thursday or Friday with officials from the local and national government and the International Olympic and Paralympic Committees to make a final decision on attendance.
IOC chief Thomas Bach arrives in Tokyo on Thursday, and will have to observe a three-day quarantine before being allowed limited movement.
Olympic participants generally will not have to observe a full 14-day quarantine, but will face restrictions during their time in Japan, with athletes limited to venues and the Olympic Village and tested daily for the virus.
Tokyo 2020 is struggling to build momentum and enthusiasm for the Games as the final countdown begins.
The torch relay that was supposed to stoke excitement as it travelled nationwide has been taken off public roads in much of the country over virus risks, and even its legs in the capital will now be held without spectators.
And fans have been asked to avoid the route of the Olympic marathon which will be run in northern Hokkaido.
Polls show most Japanese would prefer the Games be postponed again or cancelled outright, though opposition has softened in recent weeks.
