CAIRO — Protesters enraged by Hosni Mubarak's latest refusal to step down streamed into Cairo's central square Friday and took positions outside key symbols of the hated regime, promising to expand their push to drive the Egyptian president out.
The standoff posed a major test for the military as protesters stepped up calls for the army to intervene against Mubarak, a former air force commander and one of its own. The military's Supreme Council held an "important" meeting Friday morning, which was chaired by Defense Minister Field Marshal Hussein Tantawi, the state news agency reported.
"The council will issue important statement to the people after the meeting," MENA said.
Mubarak gave most of his powers to his vice president but refused to resign or leave the country late Thursday, hours after the military made moves that had all the markings of a coup.
"We are waiting for a strong reaction from the army to Mubarak's speech," said Mohammed Mustapha, a protest spokesman. He said "huge numbers" of protesters were expected Friday.
Organizers said protesters were already camped outside the presidential palace and buildings housing the Cabinet, parliament and state TV. They planned rallies at six separate protest locations, in addition to Tahrir Square, the center of the mass rallies that began on Jan. 25.
"We are going to camp everywhere to put more pressure on the regime," said Abdel-Rahman Samir, an organizer.
Hours after Mubarak's speech, hundreds of protesters converged on Egypt's presidential palace, where security is thick, Sharif Kouddous of Democracy Now said from Cairo on msnbc cable TV's "The Rachel Maddow Show." It was not known if Mubarak was there.
Top stories: Turmoil in the Middle East
Troops have pledged to protect the right to demonstrate.
However, the lengthening showdown may test that resolve, with many Egyptians eager to end the economic disruption of the protests and the army command keen to show it can impose order.
"My great fear is that if the demonstrations don't end that the military begins to split over this. You may have younger commanders who don't want to go down with the ship," said Elliott Abrams, a former U.S. deputy national security adviser.
"If the demonstrations build ... then you once again face the army with the choice they have sought to avoid — put the demonstrations down or get rid of Mubarak. They have managed so far not to make that choice, but if the people stay in the streets then they are going to have to make that choice."
Dilemma for army
In the United States, President Barack Obama expressed disappointment with Mubarak's move.
"The Egyptian people have been told that there was a transition of authority, but it is not yet clear that this transition is immediate, meaningful or sufficient," Obama said in a statement. "The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democracy, and they have not yet seized that opportunity."
Businessman Naguib Sawiris, chairman of Orascom Telecom and one of the so-called Wise Men who have been seeking to mediate out of the crisis, urged an end to protest.
"The continuation of this anarchy ... will lead to destruction," he told Al Arabiya television, saying people should go home from Tahrir Square. "I hope they leave ... We must preserve the dignity of the president."
Nobel Peace laureate and leading democracy advocate Mohamed ElBaradei predicted "Egypt will explode" and called on the military to intervene in response to Mubarak's refusal to step down.
"The Army must save the country now," he said in a Twitter post.
"This poses a real dilemma for the army," said Rosemary Hollis at London's City University. "Are they going to allow the demonstrators to escalate their demonstrations so that they push the point that Mubarak has got to go, and that means the army definitely does split with Mubarak? The demonstrators are very disappointed and there will be violence."Video: Anger swells in Cairo after Mubarak speech
Hazem Khalifa, a young chemist in Tahrir Square, vowed protests would continue. "He's tried to divide people before, now the people understand him and they've learned his ways," he said.
"This will push the country to the edge of the abyss. Tomorrow, the army will intervene, if it does not, there will be chaos," said one activist, Waleed el-Korumi. "We will lay waste to our country if we march on the palace. It's a case of both sides sticking to its guns and at the end we will lose our nation," he said, though he added that marches would remain peaceful.
Hisham Bastawisi, a pro-reform judge, called on the military to take power.
"The president has lost his legitimacy long time ago," he said. "The ball now is the army's court. The armed forces must interfere and oust him before it is too late, today before tomorrow."
The rapidly moving events raised the question of whether a rift had opened between Mubarak and the military command. Hours earlier, the military announced it had stepped in to secure the country, and a top general announced to protesters in Tahrir Square that all their demands would soon be met, raising cries of victory that Mubarak was on his way out.
Instead, Mubarak delivered a firm 17-minute address that suggested little had changed.
By clinging to office, Mubarak has defied the demonstrators clamouring for an end to his 30-year rule, setting the stage for further conflict in which the military's role could be crucial.
Even after Mubarak told the nation in a televised speech late Thursday that he was handing "some" powers to Suleiman, it remained unclear who was really in charge.Video: Egypt protesters show strength in numbers (on this page)
According to Hassan Nafaa, an independent analyst and government critic, the president retained important powers and could regain those he had ceded.
"Suleiman cannot dissolve parliament, he cannot change the cabinet and he cannot even ask for constitutional reforms without the president's consent," Nafaa said. "Mubarak still holds the reins to power, and he can easily and at any time retrieve presidential powers from Suleiman."
'Moment of change'
In Mubarak's televised speech, translated by NBC News, the embattled leader said he was addressing Egypt's youth, acknowledging the honesty of the demands of the protesters and their intentions.
"By confirming the needs of the people, and by putting Egypt first, I will dissolve the upper levels of government effective immediately and hand my power over to my vice president," Mubarak said. "This is a major moment of change."
With that said, Mubarak added, "I will not separate from Egyptian soil until I am buried underneath."Story: What you need to know about the unrest in the Mideast
Immediately after Mubarak's speech, Vice President Omar Suleiman said he was committed to doing everything possible to ensure a peaceful transfer of power .
Suleiman said the army had protected the "revolution of the youth" and encouraged protesters to "go back to your homes, go back to your jobs."
The pair of addresses followed a series of dramatic events Thursday evening that had raised expectations Mubarak was about to announce his departure. NBC News reported two sources had confirmed Mubarak's likely resignation.
Mubarak said he had requested the amendment of five articles of the constitution to loosen the now restrictive conditions on who can run for president, to restore judicial supervision of elections, and to impose term limits on the presidency.
He also annulled a constitutional article that gives the president the right to order a military trial for civilians accused of terrorism. He said that step would "clear the way" for eventually scrapping a hated emergency law that gives police virtually unlimited powers of arrest, but with a major caveat — "once security and stability are restored."
The emergency law, imposed when Mubarak came to power in 1981, gives police virtually unlimited powers of arrest.
Before the night's dramatic developments, protests had gained a spiraling momentum, fueled by labor strikes that erupted around the country. Protesters had been gearing up for even more massive demonstrations on Friday, when they planned to march from squares around Cairo into Tahrir.
After the speech, some protesters drifted out of Tahrir, tears of disappointment and anger in their eyes.
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'Huge numbers' of protesters expected
But the majority of the crowd remained, camping through the night and vowing to continue their campaign.
The mood among protesters was a mix of fury, disappointment, determination to go on and a grim realism that they should have expected little else from Mubarak.
"The speech is a provocation," said Muhammed Abdul Rahman, a 26-year-old lawyer who had joined the protesters for the first time Thursday. "This is going to bring people together more, and people will come out in greater numbers."
Washington's approach to the turmoil has been based from the start on Egypt's strategic importance — as a rare Arab state no longer hostile to Israel, as the guardian of the Suez canal linking Europe and Asia and as a major force against militant Islam in the Middle East.
The dramatic developments capped 17 days of deadly anti-government protests, some drawing a quarter-million people, to demand Mubarak's immediate ouster. What began as an Internet campaign swelled into the stiffest challenge ever to Mubarak's authoritarian rule, fueled by widespread frustration over government corruption, rampant poverty and unemployment.
NBC News' Richard Engel, Charlene Gubash, The Associated Press, Reuters and msnbc.com staff contributed to this report.