CAIRO (Reuters) - By clinging to office, Egypt's President Hosni Mubarak has defied the demonstrators clamoring 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 on Thursday that he was handing powers to Vice-President Omar Suleiman, it remained unclear who was really in charge.
Mubarak did not resign and, 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."
Protesters in Cairo's Tahrir Square and elsewhere reacted furiously to Mubarak's speech, saying they would keep up their struggle until the president quit. In the fluid swirl of events, decision-making appeared to have devolved to the military.
So far the army has refrained from dispersing protesters, but violent demonstrations might force it to choose between fellow Egyptians in the street and its loyalty to Mubarak.
Rosemary Hollis, professor of Middle East policy studies, at the City University London, predicted serious trouble ahead.
"The demonstrators are very disappointed and there will be violence," she said. "This poses a real dilemma for the army."
Earlier in the day, when a military spokesman appeared on television before Mubarak spoke and read "Communique No. 1" announcing the army's higher council was in continuous session -- in Mubarak's conspicuous absence -- it looked like a coup.
"The fact that the army met without Mubarak who is the head of the armed forces means that the military has taken over power," said Nabil Abdel Fattah, an analyst at Cairo's al-Ahram Center for Political and Strategic Studies.
Suleiman himself is a military man, like all four presidents Egypt has had since the 1952 overthrow of the monarchy, but his assumption of presidential prerogatives suggests the military prefers to keep any transition in a constitutional framework.
In Tunisia last month, former President Zine al-Abidine Ben Ali fled the country, apparently after army commanders refused to crush popular protests against his 23-year rule.
Egyptian and Western analysts said Mubarak's speech showed he had failed to understand the dynamics of the street.
"There appears to be a return to an oppressive political patriarchy that looks condescendingly at what has happened," Abdel Fattah said. Mubarak seemed intent on "reproducing the regime from within" instead of heeding popular demands.
"Millions in Tahrir Square now will be protesting anew not just for the departure of the president, but for a core change in the Egyptian political system from an authoritarian one to a democratic, human rights system."
He said Mubarak's words were at odds with the military statement which had indicated compliance with popular demands.
Osama Ghazali Harb, a political scientist who set up the liberal Democratic Front party, said Mubarak's stance was potentially "catastrophic," showing he was determined to stay on as president no matter what his people wanted.
"He says he won't listen to foreign dictates, as if the demand for him to leave is from abroad, not the street."
Western analysts agreed that Mubarak's actions would not assuage the anger of many of his compatriots.
"It's an enormously provocative step. These are desperate men, willing to gamble the fate of the nation for their own personal interest. It's a very sad historic moment for Egypt," said Robert Springborg, a professor at the U.S. Naval Postgraduate School.
The struggle to overthrow Mubarak has plunged Egypt into uncertainty after decades of repressive stagnation.
"The truth is that even the senior military now at the top of the power structure under Mubarak almost certainly have no clear idea of what happens next, and it will be days before anyone knows how well the transition will function, who goes and who stays, and how stable the result really is," said Anthony Cordesman of the Center for Strategic and International Studies.