Hundreds of thousands of demonstrators cheered Friday evening's announcement from Tahrir Square, the epicenter of Egypt's pro-democracy movement in the heart of Cairo's city center. After Mubarak's Thursday evening speech, in which he said he would stay in office until September, many had almost lost faith that they could push through their central demand. Mubarak, they have said since the very beginning, must go.

For 30 years, Mubarak's partners in the West have stood by as he ruled Egypt with an iron fist. Called "the smiling cow" prior to his ascent to power - a nickname earned for the grin he often wore as he stood behind former Egyptian President Anwar al-Sadat - Mubarak quickly became a powerful leader after his predecessor was assassinated in October 1981. He became a reliable partner to the West - and ruled his own country with force.

His portrait hung in every official office in the country; he was dutifully praised in every speech. Young Egyptians, well over half of the population, have never known a leader other than Mubarak. Indeed, for them, he came to embody all that was wrong with the country: few economic opportunities, little freedom and no right to voice criticism.

But Mubarak was valuable to the West. He never wavered in upholding his peace deal with Israel and played an outsized role in the Middle East. His far-reaching influence in the Arab world also made him indispensable. US presidents, French heads of state, British prime ministers - all maintained close relationships with the Egyptian president. He was a welcome guest in Germany too and met with almost all of Berlin's top politicians. Indeed, Germany had even been mentioned as a possible place of exile for Mubarak, before he put such speculation to rest.

Nevertheless, many have never forgiven Mubarak for declaring peace between Israel and the Arabs as "his mission." All across the Arab world, some still continued to disparage Mubarak as a "Zionist" or "lackey of the West" right up to his resignation. Pious Muslims also considered him to be their enemy because of the repression of the Muslim Brotherhood in Egypt.

It remains to be seen what the transfer of power will mean.

At the top of the list may be AMR MOUSSA, former Egyptian foreign minister. The long-time diplomat has a large popular following in Egypt because of his habit of publicly criticizing policies of the US and Israel, in marked contrast to Mubarak's quiescence.

But there's also wildcard MOHAMED ELBARADEI, the nobel laureate and former head of the International Atomic Energy Agency, who captivated Egyptian and foreign media with his return to Egypt early last year to mount a fresh challenge Mubarak's dictatorship and abuses. Many Egyptians still say they don't trust a man who spent much of his career abroad to make the call. "ElBaradei has lost credibility," says opposition politician Hamdeen Sabahi. "He is not really connected to the country and its people."

AYMAN NOUR, who ran against Mubarak in 2005 in the first multi-candidate presidential race and was subsequently jailed by the regime, slandered by state media, and stripped of his license to practice law - is a safer choice than the one they don't know. "The difference between Ayman Nour and ElBaradei is that one is a real Egyptian and the other is more of a khawaga [foreigner]," says Abdel Hamid Osman, a demonstrator.

YAHYA AL-JAMAL, a retired head of the constitutional court may be too old some say, but others want him to lead the way to constitutional reform. "He's the spokesman for the revolution," cried one bystander excitedly, as Jamal moved through the crowd in Tahrir last week. Other prominent judges, MAHMOUED AL-KHUDAIRY and ZAKARIA ABDEL AZIZ, have also attracted attention for their time spent in the square. And another popular nobel laureate, the chemist AHMED ZUWEIL has also returned to his home country to join the cause.

"We have the traditional names," says Rashwan. "But perhaps we will have dozens of new people running. The process of destroying the old regime is already finished." Now, it's time for phase two, he adds: "Building a new regime. AND I'M NOT EXCLUDING THE CHANCE OF DARK HORSES APPEARING SUDDENLY."

Estimates of the size of the crowd, which started filling Algiers' central May 1st Square, also called Concord Square, in the morning, varied. Organizers said as many as 30,000 showed up. Thousands of state security officials and police had fanned out across the capital ahead of the protests, called by a coalition of opposition leaders, trade unionists and human-rights activists.

Hacene Mezoued, a top official with the Rally for Culture and Democracy, the main political party spearheading the protests, said 1,000 protesters, including 100 women, had been arrested. He said there had been some skirmishes with the police as the security services attempted to disperse protesters, including by firing tear gas.

The Associated Press estimated the crowd at about 10,000. Protesters shouted "Power Out," and "$155 Billion, and We're Still Poor," a reference to the oil producer's estimated foreign-exchange reserves. Algerian protests first flared last month, inspired in part by the demonstrations taking place in next-door Tunisia. But in Algeria, anger over a sudden increase in food prices - enacted by the government as part of what it had billed as economic reforms - was also a big trigger.

Since then, Algeria worked to reverse those hikes. In subsequent weeks, as revolts in Tunisia and Egypt inspired other Arab protesters to demand political reform, Algerian opposition leaders have made similar demands. Last week, Algerian authorities vowed to lift a state of emergency that's been in place since 1992, one demand of political reformers. Most opposition leaders have said they aren't seeking the immediate overthrow of longtime President Abdelaziz Bouteflika.

The United States is in a delicate position because it advocates democratic reform, but wants stability in Yemen because it is seen as a key ally in its fight against Islamic militants. Hundreds of protesters had tried to reach the Egyptian embassy in Sanaa, Yemen's capital on Saturday, but security forces pushed them back. Buses ferried ruling party members, equipped with tents, food and water, to the city's main square to help prevent attempts by protesters to gather there.

There were about 5,000 security agents and government supporters in the Sanaa square named Tahrir, or Liberation. Egypt's protesters built an encampment at a square of the same name in Cairo, and it became a rallying point for their movement. Witnesses say police, including plainclothes agents, drove several thousand protesters away from Sanaa's main square on Friday night. The demonstrators tore up pictures of President Ali Abdullah Saleh and shouted slogans demanding his immediate resignation.

Saleh has been in power for three decades and tried to blunt unrest by promising not to run again. His term ends in 2013. Yemen is the Arab world's most impoverished nation and has become a haven for al-Qaida militants. Saleh's government is riddled with corruption and has little control outside the capital. Its main source of income - oil - could run dry in a decade.

"He had very tough things to say about the United States," said Ben-Eliezer, a member of the Labor Party who has held talks with Mubarak on numerous occasions while serving in various Israeli coalition governments. "He gave me a lesson in democracy and said: 'We see the democracy the United States spearheaded in Iran and with Hamas, in Gaza, and that's the fate of the Middle East,'" Ben-Eliezer said. "'They may be talking about democracy but they don't know what they're talking about and the result will be extremism and radical Islam,'" he quoted Mubarak as saying.

US support for pro-democracy elements in Iran has not led to regime change in the Islamic Republic, and Hamas, a group Washington considers to be a terrorist organization, won a 2006 Palestinian election promoted by the United States. Hamas seized control of the Gaza Strip in 2007 after a coalition government it formed with Western-backed Palestinian President Mahmoud Abbas collapsed in a power struggle. Ben-Eliezer said Mubarak expanded in the telephone call on "what he expects will happen in the Middle East after his fall".

"He contended the snowball (of civil unrest) won't stop in Egypt and it wouldn't skip any Arab country in the Middle East and in the Gulf. He said 'I won't be surprised if in the future you see more extremism and radical Islam and more disturbances - dramatic changes and upheavals,'" Ben-Eliezer added.

Protesters responded by cheering, waving flags, embracing and sounding car horns. "The people have brought down the regime," they chanted. Mr Suleiman said Mr Mubarak had handed power to the high command of the armed forces.

"In the name of God the merciful, the compassionate, citizens, during these very difficult circumstances Egypt is going through, President Hosni Mubarak has decided to step down from the office of president of the republic and has charged the high council of the armed forces to administer the affairs of the country," he said. "May God help everybody."

Ahmadinejad's remarks came hours after Egyptian President Hosni Mubarak announced he is transferring authority to his deputy but refused to step down, angering hundreds of thousands of Egyptians who have been demanding he relinquish his three-decade grip on power. Tens of thousands marched down Tehran's main boulevard in state-organized anniversary festivities, chanting in support of Egyptian anti-government protesters. Some Iranians set an effigy of Mubarak on fire while others shouted: "Hosni non-Mubarak, 'Mubarak' (congratulations) on the uprising of your people."

Iran's state TV broadcast simultaneous live footage of the gathering at Tehran's Azadi, or Freedom, Square and that of anti-government demonstrations in Cairo's downtown Tahrir Square where tens of thousands had gathered by noon Friday. Iran, which is at odds with the international community over its controversial nuclear program, has sought to portray the popular uprisings in Tunisia and Egypt as evidence of a replay of its own Islamic Revolution.

"Despite all the (West's) complicated and satanic designs... a new Middle East is emerging without the Zionist regime and US interference, a place where the arrogant powers will have no place," Ahmadinejad told the crowd. He also urged Egyptian protesters to persevere until there is a regime change. "It's your right to be free. It's your right to exercise your will and sovereignty... and choose the type of government and the rulers."

After his address, Ahmadinejad carried a placard reading, "Death to Israel." Authorities also placed Mahdi Karroubi, one of Iran's opposition leaders, under house arrest, posting security officers at his door in response to his calls for an Iranian opposition rally in support of anti-government demonstrations in Egypt.

White House national security spokesman Tommy Vietor said in a statement Thursday that Karroubi's house arrest underscored the hypocrisy of Iran's leadership. "For all of its empty talk about Egypt, the government of Iran should allow the Iranian people the same universal right to peacefully assemble and demonstrate in Tehran that the people are exercising in Cairo," he said.

Beijing has also promised to use its grain reserves to reduce the pressure on global food prices, which have surged in the past year to record highs due to the floods in Australia and a protracted dry spell in Russia. The desperate measures were evident at Baita reservoir in Shandong - one of several key agricultural provinces afflicted by four months without rain.

With nearby crops turning yellow, a mechanical digger cut a crude, open-cast well into the dried-up bed of the reservoir. Muddy water from the five-metre deep pit was pumped up to the surface via a hose that snaked past a fishing boat stranded on the cracked earth. As the water spluttered on to his wheat field, farmer Liu Baojin expressed concern the support may have come too late. Despite the emergency well digging and partial compensation from the government, he fears he may have to seek work in the city if his harvest fails. "I guess a third of my crops have already died," he said. "I'm very worried. I've never seen such a dry spell."

The problems are compounded by the growing water demands of cities and industry. On the outskirts of Sishui - which translates as Four Waters due to its historic abundance of rivers and sprints - villagers complain that they are not allowed to use the Si river that runs past their homes because the water is earmarked for the Huajin paper mill and an artificial lake in a nearby urban development.

"Global imbalances are back, with issues that worried us before the crisis - large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves - on the front burner once again," Strauss-Kahn said. "Left unresolved, these problems could even sow the seeds of the next crisis."

"When we worry about the deficiencies of the international monetary system, we are mostly worrying about volatility," he added. There is "a sense that money sometimes flows around the globe in too-volatile a fashion and that countries need a more stable, more predictable external environment in order to prosper", he said.

He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system. China, which holds much of its $2.85 trillion mountain of reserves in US Treasury bonds, has repeatedly expressed unease about the value of the dollar, while American politicians have complained that Beijing gains an unfair advantage by keeping its own currency cheap.

Strauss-Kahn's views come a week before finance ministers from the Group of 20 developed and developing nations meet in Paris to discuss proposals by French president Nicolas Sarkozy for changes to global economic governance.

The official said the issue has not caused "a serious strain" in relations between Washington and Riyadh, but that it should not surprise anyone that the two capitals see the crisis differently. "When we say that we call for democracy, what we call 'democracy' the Saudis are liable to see as chaos," the official said.

By the same token, the official could not identify a Mideast state that has equaled the Saudis in their dissatisfaction with Washington's handling of the crisis. "The Saudis have always been the most conservative regime in the region," he said. Meanwhile, protesters enraged by Mubarak's latest refusal to step down have promised massive demonstrations - possibly including a march on the presidential palace.

They have warned that Egypt could explode in violence and have pleaded for the military to intervene. Mubarak gave most of his powers to his vice president but refused to resign or leave the country late Thursday, hours after the military made moves that had all the markings of a coup. The military has offered no response following Mubarak's speech, and their position remains ambiguous. Protest spokesman Mohammed Mustapha says "huge numbers" of protesters are expected Friday. TV reports and witnesses say hundreds already have gathered outside the palace.

In statements posted earlier in the day, ElBaradei vowed continued protests and complained of violence by Mubarak's government. "We shall continue to exercise our right of peaceful demonstration and restore our freedom & dignity. Regime violence will backfire badly," ElBaradei wrote. "Threats of violence against participants in peaceful demos reveal the ugly face of a regime terrified of its own people."

They voted overwhelmingly to maintain a 140-year-old ban on convicts taking part in elections because, they said, those who commit a crime have 'broken their contract with society'. The decisive stance plunged Parliament into an unprecedented stand-off against the European Court of Human Rights.

After six hours of impassioned debate, MPs voted by 234 to 22 - a majority of 212 - to defy a ruling from the ECHR that the ban must be overturned. Dozens of Conservative backbenchers lined up to insist that after decades of toeing the line, the time has come for Britain to tell unelected Strasbourg judges that they have overstepped their authority.

Experts said the vote left Britain's relationship with the European court in 'uncharted territory'. It places the Prime Minister under intense pressure to launch a defining challenge against Strasbourg. Proposing the cross-party motion which 'supports the current situation in which no prisoner is able to vote', former Tory shadow home secretary David Davis said: 'The general point is very clear in this country: that is that it takes a pretty serious crime to get yourself sent to prison. And as a result you have broken the contract with society to such a serious extent that you have lost all of those rights: your liberty and your right to vote.'

Last night's Commons decision sends an emphatic message to the European courts that MPs are not prepared to accept their rulings on votes for prisoners. It sets the scene for an unprecedented conflict between Parliament and the European Court of Human Rights (ECHR), which is not used to having its diktats challenged. Exactly what happens next is unclear and fraught with difficulty for ministers - and David Cameron in particular.

Crowds are gathering outside the presidential palace, Tahrir Square and the offices of state TV in the city. The army said in what it called "Communique No 2" that it "confirms the lifting of the state of emergency as soon as the current circumstances end". It endorsed the transfer of President Mubarak's powers to his vice president, General Omar Suleiman, and guaranteed a free and fair presidential election, constitutional changes and "protection of the nation".

The army also urged "the need to resume orderly work in the government installations and a return to normal life, preserve the interests and property of our great people". The lifting of Egypt's state of emergency has been a key demand of the protesters. Meanwhile, the BBC's Jon Leyne in Cairo says Friday's mass protests could bring demonstrators into direct conflict with the army. It is the most dangerous moment so far in more than two weeks of protests, he adds.

Cairo resident Sherine Barakat told the BBC on Friday that she did not think there would be violence between the protesters and the army. "Yesterday in the square soldiers were saying: 'If you march to the palace, no officer will stand in your way'. I think the army will help the people," she said.

But it was more an act of protest than an effective start-up of a political party since Saudi Arabia has no elected parliament and parties and public dissent are banned by the Al Saud monarchy, which rules the world's No. 1 oil exporting country in alliance with Sunni Muslim clerics. There have been other attempts to form parties but analysts said the new "Islamic Umma" group appeared to be the first to be revealed publicly. They said members included Islamist intellectuals and lecturers, human rights activists and lawyers.

"You know well what big political development and improvement of freedom and human rights is currently happening in the Islamic world," the group of ten activists said in a letter to King Abdullah, obtained by Reuters and also posted on their website. "It's time to bring this development to the kingdom," they told the king, who is about 87 and now recuperating in Morocco after medical treatment in the United States.

Islamists and liberals both seek more political freedoms in Saudi Arabia and, while differing on details such as the rights of women, say that reform is their overriding goal. Any instability at the helm of Saudi Arabia, the strategic linchpin of US policy in the Middle East, could ripple across the Arab Gulf region and beyond.

Anti-government protests swept Tunisian President Zine al-Abidine Ben Ali out of power, triggering a revolt in Egypt that has unraveled the autocracy of President Hosni Mubarak and paralyzed the country for two weeks. King Abdullah has tried to carry out some reforms since taking power in 2005, such as trying to overhaul a school system that focuses on religion, qualifying few graduates for jobs in the private sector. But diplomats and analysts say his room for maneuver is limited because of resistance from conservatives in key ministries and the religious elite which adheres to the austere Wahhabi school of Islam.

NBC News reported that a high-ranking source inside the president's office said that Mubarak would step down and the newly appointed vice president, Omar Suleiman, would take over. This was then confirmed by a second source. The news came following repeated warnings of a military crackdown or coup.

He was not present at Thursday's supreme council meeting, despite being the commander in chief of Egypt's armed forces. Suleiman, a former army general and intelligence chief named to his post after the protests erupted January 25, was also not there. A spokesman read a statement that the council was in permanent session to explore "what measures and arrangements could be made to safeguard the nation, its achievements and the ambitions of its great people."

State TV announced that the supreme council had expressed its "support of the legitimate demands of the people." General Hassan al-Roueini, military commander for the Cairo area, told thousands of protesters in central Tahrir Square, "All your demands will be met today."