Egypt's new military rulers said on Sunday they had dissolved parliament, suspended the constitution and would govern only for six months or until elections took place, following the overthrow of Hosni Mubarak.

In a statement, the Higher Military Council which took over after 18 days of protest ended Mubarak's 30-year rule, promised a referendum on constitutional amendments.

The initial response from opposition figures and protest leaders was overwhelmingly positive. Victory, victory, chanted pro-democracy activists in Cairo's Tahrir Square. More is needed, more is needed, others yelled.

It is a victory for the revolution, said opposition politician Ayman Nour, who challenged Mubarak for the presidency in 2005 and was later jailed on forgery charges which he said were rigged. I think this will satisfy the protesters.

Mahmoud Nassar, a youth movement leader, said: The army has moved far along to meet the people's demands and we urge it to release all political prisoners who were taken before and after January 25 revolution. Only then will we call off the protests.

Earlier, troops took control of Tahrir (Liberation) Square, the fulcrum of the protests that swept Mubarak from power, to let traffic through central Cairo as the army struggled to return life to normal.

Protesters argued heatedly in Tahrir Square over whether to stay or comply with army orders to help put Egypt back on its feet. The people want the square cleared, one group chanted. We will not leave, we will not leave, replied another.

The Arab world's most populous country was taking its first tentative steps towards democracy and protest organisers were forming a Council of Trustees to defend the revolution and urge swift reform from a military intent on restoring law and order.

Police officers, emboldened by Mubarak's downfall, gathered outside the Interior Ministry to demand higher pay. Warning shots were fired in the air. No one was hurt.

Earlier, troops, some wielding sticks, pushed protesters aside to reopen Tahrir Square to traffic.

The cabinet met and for the first time, the portrait of Mubarak, believed to be holed up in the Red Sea resort of Sharm el-Sheikh, did not gaze over its proceedings as Egyptians quietly removed images of the 82-year-old former leader.

REVOLUTION CONTINUING

Protesters have demanded the immediate release of political prisoners, the lifting of a state of emergency used by Mubarak to crush opposition, the closure of military courts, fair elections and a swift handover of power to civilians.

Despite Mubarak's resignation, some protesters have said they plan to stay in the square to ensure the military council keeps its promises on transition. They plan a big demonstration on Friday to celebrate the revolution and honour those killed.

The revolution is continuing. Its demands have not been met yet, Mahmoud Nassar, an activist of the Youth of the January 25 revolution, told a news conference.

The sit-in and protests are in constant activity until the demands are met. All are invited to join, he said.

The military's strategy has been to calm the nation and the world about its intentions and, in the short term, to ensure law was being enforced after the disgraced police melted away, having failed to crush the protest with teargas and batons.

On Saturday, it said it would uphold Egypt's international obligations, which include a peace treaty with Israel.

How to handle policing has become a pressing issue.

Interior Minister Mahmoud Wagdy has said Egypt needs the speedy return of the police to duty, saying 13,000 inmates who escape from prison early in the uprising were still on the run.

Some traffic police were back on Cairo streets beside soldiers and tanks guarding intersections and key buildings.

Before the cabinet meeting, a spokesman said: The main task of this government is to restore security and order and also start the economic process, and take care of day-to-day life.

NO CABINET CHANGES

Seeking to reassure Egyptians about military rule after the cabinet met, Prime Minister Ahmed Shafiq said government affairs were being presented to the Higher Council and its president, as they were presented to the president of the republic.

There is no change in form, or method, or the process of work. Matters are stable completely, he told a news conference.

Shafiq was appointed by Mubarak when he sacked his former cabinet on January 29 in a vain effort to quell the uprising. His remarks were likely to anger Egyptians hoping Mubarak's ruling system would be dismantled in the new era.

It looks like Mubarak is still in power but behind the scenes. I am sorry for Egypt. They continue to try to fool the people, said Salem Metwali, 41, a protester in Tahrir Square.

Shafiq also said: I guarantee that this (cabinet) will return rights to the people and fight corruption.

On the future of the vice-president, appointed by Mubarak last month for the first time in 30 years, Shafiq said: The role of Omar Suleiman will be defined by the Higher Military Council.

A cabinet spokesman said there had been no request to freeze Mubarak's assets abroad, but if there is a need, they will do it. A British minister said there should be an international approach to dealing with Mubarak's overseas assets.

Besides tension in the square and at the police rally, there were demonstrations by workers from the culture and health ministries as people vented their anger after three decades of laws that prevented dissent.

TENTS REMOVED

The military was clear about its instructions for Tahrir Square.

We do not want any protesters to sit in the square after today, Mohamed Ibrahim Moustafa Ali, the head of military police, said soldiers removed protesters' tents from the square.

Protesters said soldiers had detained about 50 people and taken them to an army holding area around the Egyptian Museum, next to the square. The army had no immediate comment.

People chanted peacefully, peacefully as soldiers and military police in red berets moved in to disperse them. Scuffles broke out and some soldiers lashed out with sticks.

A hard core of a few hundred remained, with about 2,000 people milling around to watch events unfold. The spectacle of the demonstration had swollen its numbers with a wide range of people including the homeless and the curious.

The most committed protesters vowed to remain.

I will not leave the square. Over my dead body. I trust the army but I don't trust those controlling the army behind the scenes, Mohamed Salah, 27, a protester who was refusing to take down his tent.

Faten Hassan, another protester, said it was time to let the army do its job. If they fail to fulfil our demands, we know the way back to the square. Egyptians know the road to any uprising they wish to hold again, she said.

Jihad Laban, an accountant, said much work remained to make sure the revolution did not squander what it had gained.

We stood by the army in their revolution, he said, referring to the 1952 coup that toppled the British-backed monarchy. They need to stand with us in ours.

The goal was never just to get rid of Mubarak. The system is totally corrupt and we won't go until we see some real reforms. I am going to be buried in Tahrir, I am here for my children. Egypt is too precious to walk away now.