President Hosni Mubarak said on Thursday he wanted to quit but that he feared his resignation would bring chaos to Egypt, as protesters demanding an end to his 30-year rule confronted his supporters on Cairo streets.
Mubarak's government has struggled to regain control of an angry nation, inviting Islamist opponents to talks and apologizing for bloodshed in Cairo that left 10 people dead.
A bitter and bloody confrontation gripped central Cairo where armed government loyalists fought pro-democracy demonstrators intent on the Mubarak, 82, stepping down.
"I am fed up. After 62 years in public service, I have had enough. I want to go," Mubarak said in an interview with ABC.
"If I resign today, there will be chaos," he added.
In a move to try to calm the disorder, Vice President Omar Suleiman said on Thursday the Muslim Brotherhood, Egypt's most organized opposition movement, had been invited to meet with the new government as part of a national dialogue with all parties.
An offer to talk to the banned group would have been unthinkable before protests erupted on Jan. 25, indicating the giant strides made by the reformist movement. But scenting victory, they have refused negotiations until Mubarak goes.
The overture came after new Prime Minister Ahmed Shafiq apologized for the violence and the breakdown in law and order. Shafiq said he did not know who was responsible for the bloodshed, blamed by protesters on undercover police.
"As officials and a state which must protect its sons, I thought it was necessary for me to apologize and to say that this matter will not be repeated," the prime minister said.
Protesters, who numbered 10,000 in Tahrir (Liberation) Square, prepared once again to defy a curfew and sleep there in preparation for big demonstrations called for Friday as part of an uprising fuelled by poverty, corruption and recession.
'We have refused dialogue'
United Nations human rights chief Navi Pillay said up to 300 people may have died in the bloody uprising.
Protesters in Tahrir Square, dominated now by a youthful hard core including secular middle-class graduates and mostly poorer Islamist activists from the Brotherhood, barely listened, saying the concessions were too little and too late.
"Suleiman has not listened to the people's needs. We want Mubarak to leave immediately, not to stick around for another six months," said Mohamed Anis, 29, who works at the bourse.
"We have refused dialogue and negotiation with Suleiman until Mubarak steps down," he added.
The army's role in shaping events is crucial. Only on Thursday did soldiers set up a clear buffer zone around the square to separate factions after having held back. That did not prevent new clashes, as groups pelted each other with rocks.
"Allahu Akbar, the army and the people are hand in hand," chanted protesters barricaded in Tahrir Square.
Doctors in makeshift hospitals at the scene said at least 10 people were dead and 800 wounded after gunmen and stick-wielding Mubarak supporters attacked protesters on the streets for a 10th day to demand the president end his 30-year rule.
Close to the Egyptian Museum, home to 7,000 years of civilization in the most populous Arab state, men fought with rocks, clubs and makeshift shields, as US-built tanks from the Western-funded army made sporadic efforts to intervene.
The political battle behind the scenes has implications for competing Western and Islamist influence over the Middle East and its oil. European leaders joined the United States in urging their long-time Arab ally to start handing over power.
Anti-Mubarak rally in Cairo (Photo: AFP)
His government, newly appointed in a reshuffle that failed to appease protesters, stood by the president's insistence that he will go but only when his fifth term ends in September.
Mubarak keeps portraying himself as a bulwark against anarchy, or a seizure of power by Islamist radicals.
The opposition won increasingly vocal support from Mubarak's long-time Western backers for a swifter handover of power.
"This process of transition must start now," the leaders of Britain, France, Germany, Italy and Spain said in a statement.
They all echoed the message from US President Barack Obama that an orderly transition of power must start immediately.
Mubarak described Obama as a very good man, but when asked by ABC if he felt that the United States had betrayed him, he said he told the US president: "You don't understand the Egyptian culture and what would happen if I step down now."
US officials also condemned what they called a "concerted campaign to intimidate" journalists, after many were attacked by government loyalists. Those arrested included the Washington Post bureau chief in Cairo.
Opposition leaders including the liberal figurehead Mohamed ElBaradei and the Muslim Brotherhood said again that Mubarak must go before they would negotiate.
This is a trial of strength in which army commanders are expected to seek to preserve their institution's influence and wealth in the face of a massive popular rejection of the old order, widely regarded as brutal, corrupt and wasteful.
Suleiman, seen as a possible interim successor to Mubarak, took up the theme of reconciliation, promising to release detained demonstrators and to punish those who fomented trouble.
He confirmed that Mubarak's businessman son Gamal would not run for president to succeed his father. Ten days ago, that would have been shock news. It surprised no one today.
The protests were inspired by events in Tunisia, where its leader Zine al-Abidine Ben Ali was forced to flee last month.
Those supporting the calls for constitutional change and free elections saw the violence, unleashed on Wednesday by men they assume to be secret policemen and ruling party loyalists, as the desperation of a president who cannot count on his army.
It was a "stupid, desperate move", said Hassan Nafaa, a political scientist and leading opposition figure. "This will not put an end to the protests," he said. "This is not the Tahrir Square revolution, it is a general uprising."
Though less numerous than earlier in the week, there were demonstrations in Suez and Ismailia, industrial cities where inflation and unemployment have kindled the sort of dissent that hit Tunisia and which some believe could ripple in a domino effect across other autocratic Arab states.
There were also protests in the port city of Alexandria.
Many analysts see the army, which is revered in Egypt in contrast to other security forces, trying to preserve its own position by engineering a smooth removal of Mubarak, a former air force commander.
The army gave protesters heart on Monday by pledging to let them demonstrate but on Wednesday, troops stood by as Mubarak supporters charged Tahrir Square on horses and camels, lashing out at civilians. After dark, several protesters were shot dead.
Oil prices have climbed on fears the unrest could spread to affect oil giant Saudi Arabia or interfere with oil supplies from the Red Sea to the Mediterranean through the Suez Canal.
Brent crude rose above $103 a barrel on Thursday.
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