CAIRO Egyptian President Hosni Mubarak is on the verge of capitulating to protester demands to give up power but may still seek to hold on in a nominal capacity by giving presidential powers to his deputy or a joint leadership involving an army council.
The army made the first move, with an announcement called "Communique No. 1", saying the army's higher council was meeting in continuous session, a move that showed the army had taken charge of the situation and Mubarak's fate was in its hands.
Footage of the council showed Defence Minister Mohamed Hussein Tantawi and other senior officers meeting in the absence of both Mubarak and Vice President Omar Suleiman
The two obvious options are:
* Mubarak hands over powers to Suleiman, while staying nominally president. But this may not appease the protesters who want Mubarak and his allies out. The army may also be wary, because they do not want to confront angry demonstrators.
* Mubarak could hand powers to Suleiman and also empower the higher military council to oversee the transition. This could also come up against those demonstrators chanting: "Civilian, civilian, we don't want it military."
But the army is seen by many as a neutral force, so many Egyptians might support this.
In any of these two cases, one analyst said Mubarak would almost certainly have to announce martial law to bypass constitutional procedures and move straight to setting a new constitution and calling for elections.
The Muslim Brotherhood, seen as Egypt's biggest organised opposition group, has said it is concerned by developments because it "looks like a military coup". Other protesters may object to a move that hands power from one military ruler to another.
But the military is unlikely to accept an alternative route that puts them on the sidelines and ends their almost six decades of control of Egypt since King Farouk was toppled by Gamal Abdel Nasser and the "Free Officers" in 1952.
(Writing by Edmund Blair; Editing by Angus MacSwan)