Egyptian President Hosni Mubarak has offered talks on sweeping reforms with opponents at the end of a week of huge protests and pressure from Western allies and his army.
Newly-appointed vice-president Omar Suleiman appeared on state television to say the 82-year-old leader had asked him to begin dialogue with all political forces on constitutional and other reforms.
Mr Suleiman says new elections will be held in some districts, where there was evidence of irregularities in last year's parliamentary election.
He says the priority of the recently-appointed government will be to combat poverty, unemployment and corruption - key grievances of the protesters.
A massive demonstration is due to be held in Cairo on Tuesday as protesters step up efforts to force Mr Mubarak from power. Organisers have called for 1 million people to take to the streets, while a rally is also planned for Alexandria, the country's second biggest city.
Before Mr Suleiman spoke, the armed forces command had declared the demonstrators' demands legitimate and said it would not fire on peaceful protesters.
The army's statement, carried by the state news agency, said the military recognised "the legitimate demands of the honourable people."
The statement is the first such explicit confirmation by the army that it will not fire at demonstrators who have taken to the streets of Egypt since last week to try to force Mr Mubarak to quit, Reuters reports.
More than 140 people have now been killed in clashes across Egypt.
On Monday, the seventh consecutive day of unrest, tens of thousands of protesters rallied in Cairo's Tahrir Square.
Troops backed by tanks and armoured personnel carriers made no effort to disperse the crowd even two hours after a curfew started, though helicopters flew overhead.
Police on Monday returned to positions in some parts of Cairo that they abandoned after violent clashes with protesters on Friday.
Middle East analyst Roger Hardy told Radio New Zealand's Nine to Noon programme the military will decide Mr Mubarak's fate.
He says critical moment for the former president of Tunisia, ousted more than two weeks, ago came when the army said it would not use live fire on demonstrators.
President announces new cabinet
Mr Mubarak has sworn in a new cabinet, removing the unpopular interior minister Habib al-Adli.
Mr al-Adli was widely despised by anti-government demonstrators because of the corruption and brutality among members of his police force.
The new minister is General Mahmoud Wagdy, a retired police officer.
Egypt's finance minister has also lost his job, as concern grows about the impact of the past week of protests on the economy.
Looters have pillaged a number of warehouses containing ancient Egyptian artefacts, stealing and damaging some of them, the ABC reports.
A group attacked a warehouse that contained 3000 objects from the Roman and Byzantine periods, and an archaeologist says warehouses near the pyramids of Saqqara and Abu Sir were also looted.
Twitter service bypasses internet
Internet giant Google says it has launched a new service for people in Egypt to send Twitter messages without requiring an internet connection.
The government has closed down social networking services and sites to make organising rallies more difficult. Google says the service allows people to dial a telephone number and leave a voicemail which is automatically translated into a message on Twitter.
Oil price rises
Oil prices have hit their highest level in more than two years amid concerns about the political instability in Egypt.
In London on Monday, Brent oil prices jumped above $US101 a barrel for the first time since 2008.
There has been no announcement from the OPEC oil producers group on boosting output.