President Hosni Mubarak's new cabinet on Monday held its first full meeting since an uprising started nearly two weeks ago, with no concrete progress in talks with Islamists and an opposition who demand his immediate exit.
But in a possible sign of progress, the regime reportedly released a Google executive who went missing when protests broke out.
Wael Ghonim says he was behind the Facebook page that helped spark what he called "the revolution of the youth of the Internet" two weeks ago. He went missing on Jan. 27, two days after the demonstrations began.
"This is the revolution of the youth of the Internet and now the revolution of all Egyptians," Ghonim said in a television interview where he wept as he described how he spent 12 days in detention blindfolded the entire time while his worried parents had no idea what had happened to him.
Ghonim, who has been one of the most prominent activists, is Google's head of marketing for the Middle East and North Africa. He was apparently circumventing a government shutdown of the Internet — a post on a Twitter account listed under his name said: "Very worried as it seems that government is planning a war crime tomorrow against people. We are all ready to die."
Government raisesIn an attempt to defuse popular anger, the embattled regime announced a 15 percent increase in salaries and pensions.
The cabinet decision follows earlier promises to investigate election fraud and official corruption, which have done little to persuade the tens of thousands occupying downtown's Tahrir Square to end their two-week long protest.
Newly appointed Finance Minister Samir Radwan says some 6.5 billion Egyptian pounds ($960 million) will be allocated to cover the increases, which will take effect in April for the 6 million people on public pay rolls.
In the past, public sector employees have been a pillar of support for the regime, but in recent years as prices have soared, their salaries have stagnated in value forcing the government to periodically announce raises to quell dissatisfaction.
"We don't trust him and he's a liar. He's made many promises in the past," said Salih Abdel-Aziz, an engineer with a public sector company, referring to the president. "He could raise it 65 percent and we wouldn't believe him. As long as Mubarak is in charge, then all of these are brittle decisions that can break at any moment."
Mubarak hangs on Mubarak, 82, who has refused calls to end his 30-year-old presidency before September polls, has tried to focus on restoring order.
Protesters, barricaded in a tent camp in Tahrir in the heart of Cairo, have vowed to stay until Mubarak quits and hope to take their campaign to the streets with more mass demonstrations on Tuesday and Friday.
The banned Islamist Muslim Brotherhood movement was among the groups that met Egyptian government officials at the weekend, a sign of how much has already changed in an uprising that has rocked the Arab world and alarmed Western powers.
Opposition figures reported little progress in the talks. While protesters want Mubarak to step down immediately, many worry that when he does leave, he will be replaced not with the democracy they seek but with another authoritarian ruler.
With a government pledged to reform, an opposition with limited political experience, a constitutional process that mitigates against haste, and a key strategic role, Egypt's next steps must be considered carefully, U.S. officials say.
The opposition has made big gains in the past two weeks.
Mubarak has said he will not run again for president, his son has been ruled out as next in line, a vice president has been appointed for the first time in 30 years, the ruling party leadership has quit and the old cabinet was sacked.
Perhaps more important, protesters now take to the streets almost with impunity in the hundreds of thousands. Before January 25, a few hundred would have met a crushing police response in this U.S. ally whose army receives $1.3 billion in aid annually.
President Barack Obama said Egypt is "making progress" toward a solution to the political crisis.
White House spokesman Robert Gibbs said later in the day that what the Egyptian people want most to see is the government taking concrete steps to bring about demanded changes, including the end of Mubarak's government, and free and fair elections.
He said "monumental change" already has taken place.
Under Egypt's constitution, Mubarak's resignation would trigger an election in 60 days. U.S. officials said that's not enough time to prepare.
"A question that that would pose is whether Egypt today is prepared to have a competitive, open election," State Department spokesman P.J. Crowley said. "Given the recent past, where, quite honestly, elections were less than free and fair there's a lot of work that has to be done to get to a point where you can have free and fair elections."
"I think that would be a challenging undertaking," he said.
Appearing to soften her position for Mubarak to step down, U.S. Secretary of State Hillary Clinton has said her policy on Egypt looks "over the horizon" to its possible democratic future — a future that must be carefully planned.
As allies coalesced around the U.S. position, German Chancellor Angela Merkel's spokesman Steffen Seibert said it was clear that the Mubarak era was in its final phase and there would be other leaders.
"That is what's important for us, that this new direction is clear and irreversible," he said, adding: "It's not so important that individual people resign or whether there is a competition to have the quickest possible election."
Former Trade Minister Rachid Mohamed Rachid, sacked by Mubarak along with the rest of the cabinet, said: "I believe the presence of Mubarak in the next phase of transition for the next few months is very critical."
Determined protesters in Tahrir Square were settling into a routine on Monday after a bloody revolt which the United Nations says may have cost 300 lives so far. Activists have called the uprising the "Nile Revolution."
Keen to get traffic moving around Tahrir Square, the army tried early on Monday to squeeze the area the protesters have occupied. Overnight campers rushed out of their tents to surround soldiers attempting to corral them into a smaller area.
Wary of the army's effort to gain ground to try and restore the traffic flow in central Cairo, dozens of protesters slept inside the tracks of the army vehicles. The powerful army's role in the next weeks is considered critical to the future of Egypt.
"The army is getting restless and so are the protesters. The army wants to squeeze us into a small circle in the middle of the square to get the traffic moving again," protester Mohamed Shalaby, 27, told Reuters by telephone.
Back to normal?Egypt's government tried to get the country back to normal when the working week began on Sunday. Banks reopened after a week-long closure with lines of customers accessing accounts but hours, and withdrawals, were limited. Schools remained shut.
In another move to restore normality, authorities shortened the curfew, largely ignored by the hard-core protesters, to start at 8 p.m. and end at 6 a.m..
Many Egyptians, including those who took part in nationwide demonstrations last week against Mubarak, are keen to get back to work and are worried about the effects of the crisis on stability, the economy and the important tourism sector.
Egypt's pound weakened to a six-year low on the second day of trade after a week-long closure. State-controlled banks seemed to be selling dollars to support the pound.
"Things are stable. I can't say they're good, but they're not collapsing," said a trader at a Cairo-based bank.
The bourse remained closed until Sunday because of the political turmoil and Egypt's central bank reduced the size of its Treasury bill offering, possibly out of concern that nervous investors would not buy the full amount.
Government ministers will hold their first full meeting at 2:00 p.m. (7 a.m. EST) since Mubarak reshuffled his cabinet on January 28 in an attempt to appease protesters enraged by years of corruption, economic hardship and political oppression.
Crackdown on journalists?
The Egyptian authorities continued to exert pressure on the news media amid efforts to regain a sense of normality.
The military detained a correspondent for Al-Jazeera's English-language news channel for seven hours in Cairo on Sunday, said the network, which has been targeted repeatedly throughout the unrest in Egypt.
Ayman Mohyeldin, an American citizen, was detained near Tahrir Square and released seven hours later, the channel said.
Pressure on news media covering the crisis intensified last week, as pro-government mobs armed with sticks attacked Egyptian and foreign journalists as well as human rights workers and others observing and recording the violent scenes.
Dozens have been detained, sometimes for several days. One journalist, an Egyptian reporter, has been killed in the protests, dying Friday of gunshot wounds.