Egyptian President Hosni Mubarak said yesterday he had delegated power to his deputy and proposed constitutional changes but stopped short of resigning, infuriating protesters who had urged him to go.

His televised speech was met with angry chants of “Down, Down with Mubarak” among the more than 200,000 people who packed Cairo’s Tahrir Square on the 17th day of massive nationwide protests demanding the strongman’s overthrow.

Many of the protesters called for an immediate general strike and angrily addressed the army, which had deployed large numbers of troops and tanks around the protest: “Egyptian army, the choice is now, the regime or the people!”

Hopes had run high that Mr Mubarak would step down immediately after the military leadership had announced hours earlier that it would step in to ensure the country’s security and see that the people’s “legitimate” demands were met.

But by the end of his speech the 82-year-old remained President.

Speech fails to appease

Delegating his powers to his Vice President and former intelligence chief Omar Suleiman, he said he would remain leader through a transition process until September and would one day die in Egypt.

“I have decided to delegate power to the vice president based on the Constitution,” a frail Mr Mubarak said in a scratchy voice.

“I am conscious of the dangers of this crossroad... and this forces us to prioritise the higher interests of the nation.”

He went on to take an apparent swipe at the United States and other countries that have pushed him to accelerate a transition to democracy, saying: “I have never bent to foreign diktats.

“I have always preserved peace and worked for Egypt and its stability.”

The speech failed to appease protesters, who for the last two weeks have called for the end of Mr Mubarak’s regime in massive demonstrations that have rocked the most populous Arab country.

Speaking also on television soon after Mr Mubarak, Vice President Omar Suleiman urged protesters to go home or back to work.

But as they began peacefully filing out of Tahrir Square, the chants grew darker. “To the palace we are heading, martyrs by the millions!” they shouted.

Earlier, the square had been bathed in a carnival atmosphere, as many tens of thousands of Egyptians gathered to celebrate what they hoped would be Mr Mubarak’s final speech of a three-decade-long autocratic reign.

When they realised he was refusing to step down, the mood changed and deep-seated anger rose to the surface.

The crowd chanted “Neither Mubarak nor Suleiman!” as one elderly woman in the crowd moaned: “The old man just won’t give up power.”

Supermarket worker Rahman Gamal, 30, said: “Omar Suleiman and Mubarak are the same. They are two faces of the same coin. Our first demand is that he leave. If he doesn’t leave, I won’t leave.”

“He is still speaking to us as if we were fools,” said Ali Hassan, another protester. “He is a general defeated on the battlefield who will not retreat before inflicting as many casualties as he can.”

Thousands of the protesters have been occupying the square since January 28, demanding democratic reform and an end to the Mubarak regime. They have set up a sprawling tented encampment, surrounding by a cordon of troops and tanks.

US President Barack Obama said the world was watching “history unfold” and said America would do all it could to ensure a genuine transition to democracy.

Mr Obama, speaking in the northern state of Michigan, directly addressed the young people of Egypt who have swelled the massive crowds in Cairo.

“What is absolutely clear is that we are witnessing history unfold. It is a moment of transformation that is taking place because the people of Egypt are calling for change,” he said.

Earlier, tens of thousands of Egyptian workers striking nationwide had swelled the protesters’ ranks on the eve of Friday’s Muslim day of prayers, when protest groups have urged millions to turn out in what could be the biggest show of defiance yet.

A security official confirmed union reports that thousands of employees in the public sector were staging strikes in the Mediterranean city of Alexandria, the canal city of Suez and elsewhere on the north coast and the Red Sea.