The Egyptian army is to issue an important statement to the people Friday, according to the Egyptian State News Agency.

No other details were immediately available, but the latest information confirms speculations Egypt might be on the brink of a military coup as tensions escalated overnight when anti-government protesters reacted angrily to President Hosni Mubarak's Thursday evening address.

In his nationally televised address Mubarak, 82, said he would delegate some powers to Vice-President Omar Suleiman. His comments contradicted earlier reports that he was preparing to stand down immediately and disappointed the demonstrators asking for his resignation for weeks now.

Mubarak stated he would "protect the constitution and the people and transfer power to whomever is elected next September in free and transparent elections." He added that the country's emergency laws would only be lifted when conditions were right, and said he would ignore "dictates from abroad".

Watching the address in Tahrir Square, protesters waved their shoes in disgust and chanted "Down with Mubarak" when it became clear he was not going to step down. Thousands were reported to be heading towards the presidential palace some 15km away.

Meanwhile, US President Barack Obama was quoted saying the Egyptian government has yet to put forward a "credible, concrete and unequivocal" path to democracy and that Egyptians "remain unconvinced the government is serious about a genuine transition to democracy".

After the speech, Obama convened a meeting with his national security team at the White House.

In his strongly worded statement issued shortly afterwards, the US president urged restraint from all sides, and said it was "imperative that the government not respond to the aspirations of their people with repression or brutality".

The US president's remarks were the strongest statement yet from the White House on the Egypt protests.

Earlier in the day, Obama had seemed euphoric, preparing for Mubarak to step down, BBC reports.

Opposition leader Mohammed ElBaradei called Mubarak's speech an "act of deception".

Demonstrators say they will not leave until Mubarak, who has been in power for 30 years, hands over power immediately.

More than 300 people have died since protests began more than two weeks ago.