CAIRO President Hosni Mubarak ruled out resigning immediately to end a violent confrontation over his 30-year-rule, arguing this would bring chaos to Egypt, but the New York Times said the Obama administration was in talks with Egyptian officials for him to quit now.
Speaking in an interview with ABC on Thursday, after bloodshed in Cairo that killed 10 people, the 82-year-old leader said he believed his country still needed him.
"If I resign today, there will be chaos," he said. Asked to comment on calls for him to resign, he said: "I don't care what people say about me. Right now I care about my country."
The New York Times said on Friday the administration of President Barack Obama was discussing with Egyptian officials a proposal for Mubarak to resign immediately.
Under the proposal, Mubarak would turn power over to a transitional government headed by Vice President Omar Suleiman with the support of the Egyptian military, the newspaper said, citing administration officials and Arab diplomats.
Facing an unprecedented challenge to his rule from Egyptians angered by political repression, Mubarak has promised to stand down in September, appointed Suleiman a former intelligence chief as vice-president, and offered talks on reforms.
But that has failed to satisfy protesters who are hoping to rally thousands of Egyptians on Friday for a fresh demonstration to try to force Mubarak to quit now.
With the confrontation turning increasingly violent -- protesters in Cairo's Tahrir Square were attacked by Mubarak supporters on Wednesday -- the United States has increased pressure on Mubarak to begin the transition of power now.
Protesters in Tahrir (Liberation) Square -- which has become the hub of pro-democracy demonstrations -- were hoping to be joined by thousands more for a big demonstration they are calling the "Friday of Departure".
Organisers called on people to march from wherever they were towards the square, the state television building and the parliament building -- all within around a mile of one another in the heart of the city.
The U.S. State Department said it expected confrontation in what would be the 11th day of protests.
State Department spokesman P.J. Crowley said Washington believed elements close to the government or Mubarak's ruling party were responsible for the violence which erupted on Wednesday. The Interior Ministry has denied it ordered its agents or officers to attack anti-Mubarak protesters.
GOVERNMENT OFFERS TALKS
In a move to try to calm the disorder, Vice President Omar Suleiman said on Thursday the Muslim Brotherhood, Egypt's most organised opposition movement, had been invited to meet with the new government as part of a national dialogue with all parties.
An offer to talk to the banned group would have been unthinkable before protests erupted on Jan. 25, indicating progress made by the reformist movement since then. However, the opposition has refused talks until Mubarak goes.
The United States, which supplies the Egyptian army -- Mubarak's power base -- with about $1.3 billion in aid annually -- is struggling to find a solution to the crisis which does not exacerbate instability in the Arab world's most populous nation.
The White House said on Thursday Washington was discussing with Egyptians a "variety of different ways" of moving toward a peaceful transition in Egypt.
Tommy Vietor, spokesman for the White House National Security Council, said President Barack Obama has said now is the time to begin "a peaceful, orderly and meaningful transition, with credible, inclusive negotiations."
The New York Times said the U.S. proposal called for a transitional government to invite members from a broad range of opposition groups, including the banned Muslim Brotherhood, to begin work to open up the country's electoral system in an effort to bring about free and fair elections in September.
Egypt, which signed a peace treaty with Israel in 1979, has been a key U.S. ally in the Middle East. Mubarak had also justified his use of emergency rule as needed to curb Islamist militancy in a country where al Qaeda had its ideological roots.
Mubarak described Obama as a very good man, but when asked by ABC if he felt that the United States had betrayed him, he said he told the U.S. president: "You don't understand the Egyptian culture and what would happen if I step down now."
An estimated 150 people have died in the protests, which were inspired by events in Tunisia, where its leader Zine al-Abidine Ben Ali was forced to flee last month.
Oil prices have climbed on fears the unrest could spread to affect oil giant Saudi Arabia or interfere with oil supplies from the Red Sea to the Mediterranean through the Suez Canal.
(Reporting by Edmund Blair, Samia Nakhoul, Patrick Werr, Dina Zayed, Marwa Awad, Shaimaa Fayed, Alexander Dziadosz, Yasmine Saleh, Sherine El Madany, Yannis Behrakis, Jonathan Wright, Andrew Hammond, Tom Perry and Alison Williams in Cairo, Myra MacDonald in London and Leigh Thomas in Paris; Writing by Myra MacDonald; Editing by Sanjeev Miglani)