A ruling party official said earlier that Mubarak and his family had left Cairo for the glitzy Red Sea resort of Sharm el-Sheikh where there is a presidential residence. He added that this proved Mubarak had handed powers to deputy Omar Suleiman.

In the morning, Egypt's powerful military gave guarantees that promised democratic reforms would be carried out but angry protesters intensified an uprising against Mubarak by marching on the presidential palace and mobbing the state television hub.

The army's gesture was an effort to defuse an 18-day-old revolt unprecedented in modern Egypt but, in ignoring the key demand of protesters for Mubarak's ouster now, it failed to stop turmoil disrupting the economy and rattling the Middle East.

Mubarak had promised only that he would not for re-election in September and that he would preside over reforms until then.

This was not enough for the many hundreds of thousands of mistrustful protesters who rallied in cities across the Arab world's most populous and influential country on Friday, fed up with high unemployment, a corrupt elite and police repression.

The escalating confrontation has raised fear of uncontrolled violence in the most populous Arab nation, a key US ally in an oil-rich region where the chance of chaos spreading to other long stable but repressive states troubles the West.