Cairo/Washington, Feb 2 (IANS): Embattled Egyptian President Hosni Mubarak has said he would not run for re-election but defied the call to quit - the principal demand of protesters who have scaled up their movement and held the 'march of a million'. Just hours later, President Barack Obama said the transition in Egypt must begin now.
In his televised speech Tuesday night, 82-year-old Mubarak said he would not run for presidency for another term and pledged to ensure a smooth transfer of power after September.
"My main responsibility is to ensure stability, and in the next few months I will work on the country's stability," he said.
Mubarak, who is a former air chief, said: "I am a military man who served this country during war and peace and I will die on the soil of Egypt."
The announcement came after hundreds of thousands of protesters gathered at Cairo's Tahrir Square for a 'march of a million', demanding immediate removal of Mubarak following eight days of unrest across the country.
Protesters rejected Mubarak's pledge to step down at the end of his term, calling it insufficient.
Large banners screaming "Leave!" were flown off apartments in Tahrir Square, demanding that the president step down.
"Go Mubarak go, the game is over", chanted protesters.
The protests had received a filip Monday when the army said "freedom of expression" was guaranteed to all citizens using peaceful means.
"To the great people of Egypt, your armed forces, acknowledging the legitimate rights of the people" stress that "they have not and will not use force against the Egyptian people", said the army.
Efforts by the government to stifle the protests have failed miserably, as demonstrators gathered despite train services being cut and internet services being down for a fifth straight day.
Responding to Mubarak's announcement, Egyptian reformist leader and former head of the International Atomic Energy Agency Mohammed ElBaradei said that Mubarak's speech did not meet the people's demand and asked for more immediate action.
The people want Mubarak to leave as he has "lost his legitimacy", said ElBaradei.
The opposition Muslim Brotherhood has also dismissed Mubarak's offer.
Mohammed Mursi, a spokesman for the Muslim Brotherhood, said, "This satisfies none of the people's demands."
Mursi said the concession came too late, DPA reported.
Barely three hours after Mubarak's speech, US President Barack Obama warned of "difficult days ahead" and said the transition in Egypt must begin now.
"We've borne witness to the beginning of new chapter in the history of a great country and a long-time partner of the United States," Obama said in a brief statement to reporters at the White House.
Obama pledged continuing US support for both a longtime ally and the aspirations of protesting Egyptians, whose eight days of growing demonstrations led to Mubarak's dramatic announcement on state television.
Noting that he and Mubarak had just spoken by phone, Obama said Mubarak "recognises that the status quo is not sustainable and a change must take place".
Repeating earlier calls for an orderly transition in Egypt from Mubarak's nearly three decades of autocratic rule to a fully representative democracy, Obama said the transition "must be meaningful, it must be peaceful and it must begin now."
"Furthermore, the process must include a broad spectrum of Egyptian voices and opposition parties," Obama said.
"It should lead to elections that are free and fair. And it should result in a government that's not only grounded in democratic principles but is also responsive to the aspirations of the Egyptian people."
Obama's call to Mubarak was seen as a major shift in foreign policy regarding the main Arab ally of the United States and a vital partner in the Middle East peace process because of its 1978 treaty with Israel, CNN noted.
As the world was glued onto the political upheaval, opposition parties in Egypt Tuesday took their most concrete step yet towards developing an agenda, issuing a list of demands to the existing power structures to form a basis for negotiations.
The first item demanded that Mubarak "and his regime" step down. Secondly, a transitional leadership should be formed, and a committee established to write a new constitution. Finally, parliament, dominated by Mubarak's National Democratic Party, should be dissolved.
The list was sent to Vice President Omar Suleiman, the former head of the national intelligence agency, who said Monday that he would open a dialogue with "all political parties".
Mubarak reshuffled his government Monday in an attempt to defuse the protest against his regime, but protesters rejected the changes and said he must surrender power.
The country, stuck without serious democratic reforms for decades, has also seen its economy stagnate and the middle class had watched its purchasing power decline.
Poverty is rife among Egypt's 80 million people, nearly half of whom are below the age of 35.
The economic impact of the efforts to oust Mubarak were being felt, however, with prices of staple foods rising and people reporting shortages of cash and other goods. The stock market has been closed for nearly a week.