Hosni Mubarak, the Egyptian president, has refused to step down from his post, saying that he will not bow to "foreign pressure" in a televised address to the nation.
Mubarak announced that he had put into place a framework that would lead to the amendment of six constitutional articles in the address late on Thursday night.
"I can not and will not accept to be dictated orders from outside, no matter what the source is," Mubarak said.
He said he was addressing his people with a "speech from the heart".
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Mubarak said that he is "totally committed to fulfilling all the promises" that he has earlier made regarding constitutional and political reform.
"I have laid down a vision ... to exit the current crisis, and to realise the demands voiced by the youth and citizens ... without undermining the constitution in a manner that ensures the stability of our society," he said.
Mubarak said he had "initiated a very constructive national dialogue ... and this dialogue has yielded preliminary agreement in stances and vews".
He said he would stick by his earlier announcment of not seeking re-election in September, though he did delegate some powers to Omar Suleiman, the vice-president.
A state of emergency, which has been in place since Mubarak took power 30 years ago, remains in place, though the president promised to lift it as some unspecified point in the future.
"I will remain adamant to shoulder my responsibility, protecting the constitution and safeguarding the interests of Egyptians [until the next elections].
"This is the oath I have taken before God and the nation, and I will continue to keep this oath," he said.
Mubarak said the current "moment was not against my personality, against Hosni Mubarak", and concluded by saying that he would not leave Egyptian soil until he was "buried under it".
Mubarak's comments were not well-received by hundreds of thousands gathered at Cairo's Tahrir [Liberation] Square and in other cities, who erupted into angry chants against him. Pro-democracy protesters had been expecting Mubarak to resign, and their mood of celebration quickly turned to extreme anger as they heard the president's speech.
Rawya Rageh, Al Jazeera's correspondent in Liberation Square said the "mood completely altered as the president progressed with his speech", with protesters expressing "frustration and anger" at him.
Hundreds took off their shoes and waved them angrily at a screen showing Mubarak's speech, shouting "Leave, leave!"
'Go back home'
Omar Suleiman, the vice-president, addressed the nation in a televised address shortly after Mubarak's speech, and called on protesters to "go back home" and "go back to work".
He said he had been delegated by the president "the responsibilities to safeguard the stability of Egypt, to safeguard its ... assets ... to restore peace and security to the Egyptian public, and to restore the normal way of life".
He said that a process of dialogue with the opposition had yielded positive results, and that "a roadmap has been laid down to achieve the majority of demands".
The vice-president said that steps had to be taken to "safeguard the revolution of the youth", but also called for protesters to "join hands" with the government, rather than risk "chaos".
He told Egyptians "not [to] listen to satellite television stations, whose main purpose is to fuel sedition and to drive a wedge among people".
Earlier, the Supreme Council of Egyptian Armed Forces had met to discuss the ongoing protests against Mubarak's government.
In a statement entitled 'Communique Number One', televised on state television, the army said it had convened the meeting response to the current political turmoil, and that it would continue to convene such meetings.
Thurday's meeting was chaired by Mohamed Tantawi, the defence minister, rather than Mubarak, who, as president, would normally have headed the meeting.
"Based on the responsibility of the armed forces and its commitment to protect the people and its keenness to protect the nation... and in support of the legitimate demands of the people [the army] will continue meeting on a continuous basis to examine measures to be taken to protect the nation and its gains and the ambitions of the great Egyptian people," the statement.
Tens of thousands poured into Tahrir Square after the army statement was televised. Thousands also gathered in Alexandria, Egypt's second city, our correspondent there said.
Earlier, Hassan al-Roweni, an Egyptian army commander, told protesters in the square that "everything you want will be realised".
Hassam Badrawi, the secretary general of the ruling National Democratic Party (NDP), told the BBC and Channel 4 News earlier on that he expected Mubarak to hand over his powers to Omar Suleiman, the vice-president during his address.
"I think the right thing to do now is to take the action that would satisfy ... protesters," Badrawi told BBC television in a live interview.
Ahmed Shafiq, the country's prime minister, also told the BBC that the president may step down on Thursday evening, and that the situation would be "clarified soon". He told the Reuters news agency, however, that Mubarak remained in control, and that "everything is still in the hands of the president".
However, Anas el-Fekky, Egypt's information minister, denied all reports of Mubarak resigning from early in the day.
"The president is still in power and he is not stepping down," el-Fekky told Reuters. "The president is not stepping down and everything you heard in the media is a rumour."
Mubarak met with Suleiman, the vice-president, at the presidential palace ahead of his address.
'Witnessing history unfold'
Mahmoud Zaher, a retired general in the Egyptian army, told Al Jazeera earlier in the day that Mubarak's absence from the army meeting was a "clear and strong indication that [Mubarak] is no longer present", implying that the Egyptian president was not playing a role in governance any longer.
In short comments ahead of a scheduled speech at Northern Michigan University, Barack Obama, the US president, said the US was watching the situation in Egypt "very closely". Mubarak had not spoken at that time.
"What is absolutely clear is that we are witnessing history unfold," he said, adding that this was a "moment of transformation" for Egypt.
"Going forward, we want ... all Egyptians to know that America will continue to do everything that we can to support an orderly and genuine transition to democracy."
Binyamin Netanyahu, the Israeli prime minister, responded to reports that Mubarak may resign by saying that he hoped whoever replaced him would uphold Egypt's peace treaty with Israel, according to an Israeli radio report.
Catherine Ashton, the European Union's foreign affairs chief, said that the 27-nation bloc is ready to help Egypt build a "deep democracy".
"I reiterated that no matter what happens in the next hours and days, the European Union stands ready to hep build the deep democracy that will underpin stability for the people of Egypt," she said in a statement, referring to a conversation she had with Aboul Gheit, the Egyptian foreign minister, earlier in the day.
Protesters had earlier responded to statements from political leaders as indicating that they had been successful in their key demand of wanting Mubarak to step down.
Wael Ghonim, the Google executive who has played a key role in helping protesters get organised, said on the microblogging site Twitter on Thursday evening: "Mission accomplished. Thanks to all the brave young Egyptians."
Ahead of the speech, Jacky Rowland, our correspondent in Tahrir Square, described the atmosphere as "electric", with "standing room only" in the central Cairo area. She said that thousands gathered there were "celebrating a victory which has been anticipated, rather than actually achieved".
In Alexandria, Jamal ElShayyal, our correspondent, said the atmosphere turned "from joyous to now furious" as Mubarak completed his speech.
Labour union strikes
The developments came as the 17th day of pro-democracy protests continued across the country on Thursday, with labour unions joining pro-democracy protesters.
Egyptian labour unions held nationwide strikes for a second day, adding momentum to the pro-democracy demonstrations in Cairo and other cities.
Al Jazeera correspondents in Cairo reported that thousands of doctors, medical students and lawyers, the doctors dressed in white coats and the lawyers in black robes, marched in central Cairo earlier on Thursday and were hailed by pro-democracy protesters as they entered Tahrir [Liberation] Square.
The artists syndicate and public transport workers, including bus drivers, also joined the strikes, our correspondents reported.
Pro-democracy supporters across the country had early on Thursday called for a ten-million strong demonstration to take place after this week's Friday prayers.