"I demanded today that the government resign. Tomorrow I will appoint a new government," Mubarak, 82, told the nation in a TV address.
The largest country in the Arab world with a population of 80 million, Egypt, plunged into mass opposition riots on January 25 with thousands of people demanding Mubarak step down after three decades in power.
In his speech, the president said he supports the people`s right to express their will and hold rallies, but added the demonstrators "went beyond the legal limits" in some cases. He also pledged to improve living standards and democratize the country, but his words were unlikely to be perceived seriously.
At least 18 people have been killed and over 1,000 injured in clashes across the country since the protests began, inspired by the so-called Jasmine Revolution in Tunisia. Tunisian President Zine al-Abidine Ben Ali fled to Saudi Arabia earlier in January.
There have been numerous reports of looting in Cairo.
U.S. President Barack Obama called on Egypt to prevent violence.
"As the situation continues to unfold, our first concern is preventing injury or loss of life. So I want to be very clear in calling upon the Egyptian authorities to refrain from any violence against peaceful protestors," he said.
Moscow believes that the only way to restore peace in Egypt is to make sure the actions of all sides are in line with the law, the Russian Foreign Ministry said on Friday.
"What is happening in Egypt raises serious concerns in Moscow," spokesman Alexander Lukashevich said, adding that the most important challenge was making sure the developing situation in Egypt does not become unlawful.
"We are convinced that this is the only way to restore stability in the country, to ensure the interests of all segments of the population and to find solutions to pressing problems," he said.(*)
Editor: Ruslan Burhani
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