President Hosni Mubarak defied a quarter million protesters demanding he step down immediately, announcing on Tuesday he would serve out the last months of his term and "die on Egyptian soil."
He promised not to seek re-election, but that did not calm public fury as clashes erupted between his opponents and supporters.
The protesters, whose numbers multiplied more than tenfold in a single day on Tuesday for their biggest rally yet, have insisted they will not end their unprecedented week old wave of unrest until their ruler for nearly three decades goes.
Mubarak's halfway concession -- an end to his rule seven months down the road -- threatened to inflame frustration and anger among protesters, who have been peaceful in recent days.
In the Mediterranean city of Alexandria, clashes erupted between several hundred protesters and government supporters soon afterward, according to footage by Al-Jazeera television. The protesters threw stones at their rivals, who wielded knives and sticks, until soldiers fired in the air and stepped in between them, said a local journalist, Hossam el-Wakil.
The speech was immediately derided by protesters in Cairo's central Tahrir Square. Watching on a giant TV, protesters booed and waved their shoes over their heads at his image in a sign of contempt.
"Go, go, go! We are not leaving until he leaves," they chanted.
One man screamed, "He doesn't want to say it, he doesn't want to say it."
In the 10 minute address, the 82 year old Mubarak appeared somber but spoke firmly and without an air of defeat. He insisted that even if the protests had never happened, he would not have sought a sixth term in September. Mubarak said he would serve out the rest of his term working "to accomplish the necessary steps for the peaceful transfer of power."
He said he will carry out amendments to rules on presidential elections. Mubarak, a former air force commander, vowed not to flee the country.
"This is my dear homeland ... I have lived in it, I fought for it and defended its soil, sovereignty and interests. On its soil I will die. History will judge me and all of us."
The step came after heavy pressure from his top ally, the United States.
Soon after Mubarak's address, President Barack Obama said at the White House that he had spoken with Mubarak and "he recognizes that the status quo is not sustainable and a change must take place."
Obama said he told Mubarak that an orderly transition must be meaningful and peaceful, must begin now and must include opposition parties.
Earlier, a visiting Obama envoy -- former ambassador to Egypt Frank Wisner, who is a friend of the Egyptian president -- met with Mubarak and made clear to him that it is the US "view that his tenure as president is coming to a close," according to an administration official, who spoke on condition of anonymity because of the delicacy of the ongoing diplomacy.
The United States has been struggling to find a way to ease Mubarak out of office while maintaining stability in Egypt, a key ally in the Mideast that has a 30 year old peace treaty with Israel and has been a bulwark against Islamic militancy.
Mubarak would be the second Arab leader pushed from office by a popular uprising in the history of the modern Middle East, following the ouster last month of the president of Tunisia, another North African nation.
The US ambassador in Cairo, Margaret Scobey, spoke by telephone on Tuesday with Nobel Peace laureate Mohamed ElBaradei, the embassy said. ElBaradei, a pro democracy advocate and one of the opposition's most prominent leaders, has taken a key role in formulating the movement's demands.
He is also a member of a new committee formed by various factions to conduct any future negotiations on the protesters' behalf once Mubarak steps down.
There was no immediate word on what he and Scobey discussed. Only a month ago, reform activists would have greeted Mubarak's announcement with joy; many Egyptians believed Mubarak was going to run again despite health issues. But after the past week of upheaval, Mubarak's address struck many of his opponents as inadequate.
"The people have spoken. They said no to Mubarak, and they will not go back on their words," said Saad el-Katatni, a leading member of the fundamentalist Muslim Brotherhood. "Enough suffering. Let him go, and leave the Egyptians to sort themselves out."
Ayman Nour, a former presidential candidate who is a member of the negotiating committee, said Mubarak clearly didn't get the message. "This is a unique case of stubbornness that will end in a disaster," he said. "It is only expected that he wasn't going to run because of his age. ... He offered nothing new."
Tuesday's protest marked a dramatic escalation that organizers said aims to drive Mubarak out by Friday, with more than 250,000 people flooding into Tahrir, or Liberation, Square.
Protesters jammed in shoulder to shoulder: farmers and unemployed university graduates, women in conservative headscarves and women in high heels, men in suits and working-class men in scuffed shoes.
Many in the crowd traveled from rural provinces, defying a government transportation shutdown and roadblocks on intercity highways. They sang nationalist songs, danced, beat drums and chanted the anti-Mubarak slogan "Leave! Leave! Leave!" as military helicopters buzzed overhead.
Similar demonstrations erupted in at least five other cities around Egypt. Soldiers at checkpoints set up at the entrances of the square did nothing to stop the crowds from entering.
The military promised on state TV Monday night that it would not fire on protesters answering a call for a million people to demonstrate, a sign that army support for Mubarak may be unraveling.
The movement to drive Mubarak out has been built on the work of online activists and fueled by deep frustration with an autocratic regime blamed for ignoring the needs of the poor and allowing corruption and official abuse to run rampant.
After years of tight state control, protesters emboldened by the Tunisia unrest took to the streets on Jan. 25 and mounted a once-unimaginable series of protests across this nation of 80 million.
The repercussions were being felt around the Mideast, as other authoritarian governments fearing popular discontent pre-emptively tried to burnish their democratic image.
Jordan's King Abdullah II fired his government on Tuesday in the face of smaller street protests, named an ex prime minister to form a new Cabinet and ordered him to launch political reforms.
The Palestinian Cabinet in the West Bank said it would hold long promised municipal elections "as soon as possible."
Egypt's protesters have rejected earlier concessions by Mubarak, including the dissolution of his government, the naming of a new one and the appointment of a vice president, intelligence cheif Omar Suleiman, who offered a dialogue with "political forces" over constitutional and legislative reforms.
In an interview with Al-Arabiya television on Tuesday, ElBaradei dismissed Suleiman's offer, saying there could be no negotiations until Mubarak leaves. In his speech, Mubarak said the offer still stands.