CAIRO—Egyptian President Hosni Mubarak announced he will delegate some powers to his vice president, under pressure from the hundreds of thousands of protesters massed in the center of the country's capital, but didn't say he would resign as many had expected.

In Tahrir Square, protesters demanding his immediate resignation responded to the speech in anger, chanting "Leave, leave."

Earlier, Egypt's powerful military signaled it was moving to take control of the country. State television showed the Supreme Council of the Armed Forces meeting—conspicuously without Mr. Mubarak present.

The armed forces "have started taking necessary measures to protect the nation and support the legitimate demands of the citizens," an army spokesman said on state television.

But Mr. Mubarak's speech looked unlikely to resolve a 17-day standoff between protesters demanding Mr. Mubarak's exit and a regime that has steadfastly refused to concede.

Hossam Badrawy, the new secretary-general of the ruling National Democratic Party had earlier said he told Mr. Mubarak in a telephone call that the president needed to step down for the good of the country.


The armed forces' meeting and statement that followed represented a clear and unambiguous move into the political arena by the military, and a break with its public posture as neutral and there simply to ensure security.

The events also heralded a new, uncertain age in the Middle East, where Egypt has formed a key anchor of U.S. foreign policy and Israel's security.

Israeli Defense Minister Ehud Barak, visiting Washington, voiced deep concern about the implications of the unrest in Egypt during his talks with top Obama administration officials and key lawmakers, according to officials briefed on the exchanges.

In a series of meetings in Washington, Israeli officials warned their American counterparts that the changes could start a broader "earthquake" that could sweep the region and privately questioned Washington's wisdom in pushing for the ouster of "our friends," according to one participant.

Israeli officials voiced support for the Egyptian military, but raised concerns that "it might have a hard time holding it together," another participant said.

For regional heavyweight Saudi Arabia, the changes represent a significant diplomatic setback that could complicate its foreign policy across the Middle East—with repercussions stretching from Iraq to the Israeli-Palestinian conflict.

In public statements and in conversations with U.S. President Barack Obama, Saudi King Abdullah had offered full support to Mr. Mubarak, an important regional partner for the kingdom.

As rumors of Mr. Mubarak's imminent departure spread earlier Thursday, more protesters streamed into Tahrir Square as the sun set, forming what appeared to be the largest crowd yet in more than two weeks of mass demonstrations. They waved flags and danced to nationalistic music blaring from loudspeakers. Groups formed circles and danced.

Several people said they were coming to the square for the first time. Ali Hamdawy, a 49-year-old general manager for a multinational pharmaceutical company, said he decided this was the time, and he brought his two teenage daughters and his teenage son.

"We were afraid to come before, but now we feel confident that it's the right moment," he said. "This is the beginning."

On Thursday evening, before Mr. Mubarak's address, Google Inc. executive and Egyptian protest leader Wael Ghonim said in his Twitter account: "Revolution 2.0: Mission Accomplished."

The White House had described the situation in Egypt as fluid. During an economic event in Michigan, President Obama called for an "orderly and genuine" transition to democracy in the country. The U.S. president said his administration was watching the situation in Egypt closely and would have more to say about it later.

The mood in Tahrir Square quickly turned joyous as soon as the comments by Mr. Badrawy, the NDP chief, were released.

"I have no definite information, but that is my expectation" that he will step aside," Mr. Badrawy said. "This is the only way to restore confidence in Egypt."

Mustafa Elsadda, a 50-year-old architect, and his wife and two daughters, joined the protesters at the square Thursday night. It was their first nighttime visit. They didn't want to miss what they hoped would be a historic night for their nation.

"We are expecting him to resign," said Mr. Elsadda. "I never dreamed this would happen."

"It means a new era," said his 20-year-old daughter, Alia.

"Egypt has so much potential, we just need a leader with integrity and honor, and now maybe we can have that. "

Many protesters were jubilant at the prospect of an exit by Mr. Mubarak, but were already looking ahead to other demands. "Its our right to celebrate this victory, but the mission is not completed," said Mahmoud Abdel Hamid, 45, who said he has been at Tahrir since Jan. 28.

The youth movements that kicked off the uprising with a surprisingly large demonstration Jan. 25 held an emotional and chaotic news conference in the lobby of the Journalists Syndicate building downtown.

They announced the formation of a new group—the Front for the Support of the Egyptian Revolution— that brought in more than 30 elders and prominent opposition figures.

Ziad al-Alimi, one of the youth leaders, called for an end to Egypt's longstanding state of emergency, the dissolution of parliament, a transitional government, new elections, complete freedom of expression and a new constitution.

U.S. intelligence agencies have been caught largely off guard by events in Egypt.

"I got the same information you did, that there is a strong likelihood that Mubarak may step down this evening, which would be significant in terms of where the hopefully orderly transition in Egypt takes place," CIA Director Leon Panetta told a congressional hearing on Thursday. Mr. Obama's intelligence chief, James Clapper, made only a passing reference to the upheaval in a report to Congress on Thursday on global threats, saying in his prepared remarks that the situation with Mr. Mubarak's regime was "quite fluid."

—Summer Said in Cairo and Adam Entous in Washington contributed to this article.