US president Barack Obama today said talks to resolve Egypt's crisis were making progress, but the Muslim Brotherhood in Cairo said it could quit the process if opposition demands were not met.
Mr Obama's comments seemed to contradict those by Egyptian opposition figures who reported little progress in the talks over demands that include a call for the immediate exit of President Hosni Mubarak.
"Obviously, Egypt has to negotiate a path and they're making progress," Mr Obama told reporters in Washington.
The United States has urged all sides to allow time for an "orderly transition" to a new political order in Egypt, for decades a strategic ally. But protesters worry that when Mr Mubarak does leave, he will be replaced not with the democracy they seek but with another authoritarian ruler.
The potential rise to power of the banned Muslim Brotherhood, widely seen as by far the best organised opposition group, troubles Egypt's Western allies. Mr Obama has said the Islamist group lacks majority support.
Nobel Peace laureate Mohamed ElBaradei, who has emerged as a figurehead for the opposition coalition, criticised fledgling negotiations and said he was not invited. "It is all managed by the military and that is part of the problem." he told NBC.
Mr Mubarak (82), who refuses calls to end his 30-year-old rule before September polls, saying his resignation would cause chaos in the Arab world's most populous nation, has tried to focus on restoring order, and his government seems to be buying time.
Protesters, barricaded in a tent camp in Tahrir Square in the heart of Cairo, have vowed to stay until Mr Mubarak quits and hope to take their two-week campaign to the streets with more mass demonstrations tomorrow and Friday.
Keen to get traffic moving around Tahrir Square, the army tried early today 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.
The powerful army's role in the next weeks is considered critical to the future of Egypt.
The government issued a statement after a first round of talks yesterday and said there was agreement on a road map for talks, which gave little ground on many opposition demands.
It suggested reforms would be implemented with Mr Mubarak staying in power until September. It also put conditions on lifting emergency law, which the opposition says has been used to stifle dissent and should end immediately.
Mr Mubarak's new cabinet pledged today to keep subsidies and draw in foreign investment in its first meeting since the uprising over poverty, high prices and an end to Mr Mubarak's rule.
With a government pledging 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, US officials say.
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 their hundreds of thousands.
Reuters