The United States is discussing with Egyptian officials a plan for President Hosni Mubarak to quit immediately and turn power over to a transitional government headed by Vice President Omar Suleiman, The New York Times reported.

The report, which cited Obama administration officials and Arab diplomats, said the plan was aimed at getting backing from the Egyptian military.

The report said that even though Mubarak has declined to step down, officials from both governments are holding talks about a plan in which Suleiman, backed by Egyptian armed forces, would immediately begin a process of constitutional reform.

The Times said the proposal calls for the transitional government to invite members from a broad range of opposition groups, including the banned Muslim Brotherhood, to start a process to hold free and fair elections in September.

Meanwhile, Mubarak said in an interview yesterday as deadly protests raged for a tenth day that he would like to step aside, but feared the country would be engulfed in chaos.

The 82-year-old veteran president said he was "fed-up with being president and would like to leave office now, but cannot, he says, for fear that the country would sink into chaos," ABC television's Christiane Amanpour reported after an interview in Cairo.

Mubarak spoke as deadly clashes between his opponents and supporters raged for a second day and after his vice president urged protesters to go home, also criticising their demands for the president's ouster as a "call for chaos."

On Tuesday night, Mubarak -- who has ruled for three decades -- had announced he would not stand for election to a sixth term in September, but would finish his mandate to guarantee an orderly transition.

"I don't care what people say about me. Right now I care about my country, I care about Egypt," he said on Thursday. "I was very unhappy about yesterday. I do not want to see Egyptians fighting each other."

Amanpour said in her account of the interview: "He told me that he is troubled by the violence we have seen in Tahrir Square over the last few days but that his government is not responsible for it.

"Instead, he blamed the Muslim Brotherhood, a banned political party here in Egypt," she said.

The United States meanwhile urged the Mubarak government to take immediate steps towards a political transition.

"Vice President Biden urged that credible, inclusive negotiations begin immediately in order for Egypt to transition to a democratic government that addresses the aspirations of the Egyptian people," a White House statement said.

US Secretary of State Hillary Clinton called on the government and opposition to start talks "immediately" on the handover of power, something that the latter are so far refusing.

"I urge the government and a broad and credible representation of Egypt's opposition, civil society and political factions to begin immediately serious negotiations on a peaceful and orderly transition," she said.

US President Barack Obama had called for the transition to begin immediately after Mubarak announced late on Tuesday he would not seek re-election in September.

But the Egyptian foreign ministry rejected his call and similar ones from other world leaders, saying they "sought to inflame the internal situation."

Earlier, Vice President Omar Suleiman, addressing protesters hunkered down in Cairo's Tahrir Square, said: "End your sit-in. Your demands have been answered."

Shortly afterwards, relatives said seven leaders of the youth protest had been arrested after meeting leading dissident Mohamed ElBaradei at a cafe outside Cairo.

Suleiman, the former head of the intelligence services, suggested that attacks on protesters that have killed at least eight people and injured hundreds could have resulted from a plot.

"We will look into (the violence), into the fact it was a conspiracy," he said, adding that it could have been instigated by some "with foreign agendas, the Muslim Brotherhood, certain parties or businessmen."

Yet in the same interview on state television, he said the Muslim Brotherhood had been invited to join talks between the government and opposition aimed at ending the protests.

That offer was rejected, as was an earlier one by Prime Minister Ahmed Shafiq to go to Tahrir Square and talk to the protesters.

Amid the political manoeuvring, pro- and anti-government forces battled for control of the square which has been the epicentre of protests that erupted on January 25.

The health ministry said eight people were killed and at least 836 hurt in the latest fighting.

Suleiman's firm stance was in contrast to Shafiq, who apologised for the deadly violence that has rocked the square and surrounding areas, thought by many to have been sparked by government agents provocateurs.

Shafiq also said he was "ready to go to Tahrir Square to talk to the protesters" in a reversal of the government's previous stance.

But ahead of Clinton's call for negotiations, virtually no one in the opposition was willing to talk.

Amr Salah, a representative of those organising the Tahrir demonstrations, told AFP they "will not accept any dialogue with the regime until our principal demand is met, and that is for President Hosni Mubarak to step down."

Spokesman Mohammed Mursi said "the Muslim Brotherhood categorically rejects any dialogue with the regime without any hesitation."

And the National Association for Change rejected any talks with the regime before Mubarak goes, spokesman Mohammed Abul Ghar told AFP.

The association includes former UN atomic energy watchdog chief and Nobel peace laureate ElBaradei, Muslim Brotherhood members, the Kefaya (Change) movement and other political parties.

Undaunted by what they say has been a regime campaign of intimidation, the protesters say they will proceed with plans for a massive demonstration on Friday, their designated "departure day" for Mubarak.

The latest violence broke out early on Wednesday afternoon, raged through that night and was continuing sporadically late Thursday.

A medical official, Dr Mohsen Abdulfatah, told AFP that at least 300 people were wounded on Thursday alone.

Shafiq lamented the lack of police, who disappeared from the streets on Friday night after two days of running street battles that caused most of the casualties so far.

"I do not have enough police," Shafiq said. "When the army moved in many of the riot police went back to their villages and we can't get them to come back."

Several foreign journalists have been the target of violent attacks, a media watchdog and news organisations said, apparently on charges of fuelling the uprising with their coverage.

Clinton "condemned in the strongest terms" attacks on reporters, saying: "The Egyptian government must demonstrate its willingness to ensure journalists' ability to report on these events to the people of Egypt and to the world."

UN chief Ban Ki-moon said of attacks on journalists and human rights activists: "This is outrageous and totally unacceptable, it must stop now."

According to UN estimates, more than 300 people have died since the unrest broke out on January 25, with close to 4,000 injured.

On the economic front, the Fitch agency lowered Egypt's debt ratings by one notch, following the lead of Moody's and Standard & Poor's.

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