WASHINGTON President Hosni Mubarak's speech announcing he will not seek reelection in September came after Washington delivered its clearest message yet that he should bow to popular pressure and prepare to transfer power.
After days of pressing Mubarak to address the grievances of his people, Obama sent an envoy to privately urge the Egyptian president on Tuesday to prepare for a transition of power.
Hours later, Obama and his advisers watched a recorded speech by Mubarak in which the Egyptian leader said he would not run for the presidency in September and would work in the last months of his term to allow the transfer of power.
Obama, who is to deliver remarks on Egypt later on Tuesday, has sought to balance his desire to see reform with concern that change take place in an orderly fashion in Egypt, a longtime U.S. ally in the region and the most populous Arab nation.
It was far from clear that the path to transfer power that Mubarak laid out would satisfy the hundreds of thousands of protesters who had gathered across Egypt earlier in the day to call on him step down immediately.
"It won't work. This just really won't work," Elliot Abrams, a former deputy national security adviser, told CNN.
"I can't see anybody in Tahrir Square accepting that he will be president for eight more months and that he would, after 30 years, be trusted to be the man in charge of the democratic transition. Why would anyone believe that?"
Former U.S. ambassador Frank Wisner met with Mubarak earlier and delivered a message about the need to prepare for an orderly transition, according to U.S. officials.
Critics have accused the U.S. administration of being slow to grasp the scale of upheaval in Egypt after similar protests toppled nearby Tunisia's longtime president on January 14.
The Obama administration reached out on Tuesday, not only to Mubarak, but to other key players on both sides of the crisis.
The U.S. ambassador to Egypt, Margaret Scobey, spoke to Nobel Peace laureate Mohamed ElBaradei, an opposition figure who has seen rising support from a broad swath of Egyptian groups.
U.S. Defense Secretary Robert Gates spoke with Mohamed Hussein Tantawi, Egypt's defense minister. The Pentagon declined to give details about the call.
Oil prices jumped above $102 per barrel on Tuesday amid concern about port disruptions in Egypt.
ElBaradei, the former head of the U.N. nuclear watchdog, returned to Egypt last week and has since seen growing support from opposition groups, including the banned Islamist group the Muslim Brotherhood, Christians, intellectuals and others.
Edward Walker, a former U.S. ambassador to Egypt and Israel, said there may be little patience among Egyptians for a graceful exit for Mubarak.
"I think we are going to see continuing demands for his immediate ouster," Walker said.
Some U.S. lawmakers also reacted with skepticism to Mubarak's announcement. The U.S. senator who oversees foreign aid said Mubarak had no credibility to oversee Egypt's transition, and he renewed a threat to withhold aid from Egypt if it necessary to push for democracy there.
"President Mubarak's decision to stand down from future leadership of the government is welcome, but his continued role in Egypt's transition is unrealistic," said Senator Patrick Leahy, who chairs the Senate appropriations subcommittee that approves U.S. foreign aid.
"We (the United States) should do what we can to support a transition to democracy including, if it becomes necessary, withholding aid to the government," Leahy, a Democrat, said.
Senator John Kerry, a Democrat who is close to Obama, said Mubarak had made an important announcement about bringing his presidency to an end, but "...it remains to be seen whether this is enough to satisfy the demands of the Egyptian people for change."
Mubarak should now work with the military and civil society to establish a caretaker government, Kerry, chairman of the Senate Foreign Relations Committee, said in a statement.
Kerry, in an opinion piece in the New York Times published earlier on Tuesday, had called on Mubarak to quit power.
But Obama and his aides have been reticent about publicly urging Mubarak, 82, to step down, in part of concern that it would unsettle other authoritarian U.S. allies in the region.
Brian Katulis, security analyst at the Center for American Progress, said Mubarak's move was the start of a "very complicated political transition and negotiated process."
"It is unclear what comes next," Katulis said.
(Additional reporting by Susan Cornwell, Phil Stewart and David Alexander; writing by Caren Bohan; editing by Mohammad Zargham, Frances Kerry and Eric Walsh)