Egypt's ruling generals offered on Tuesday to transfer power to a civilian president by July in a dramatic attempt to placate protesters and defuse a political crisis that has jolted plans for the country's first free election in decades.
The military council, in power since Hosni Mubarak was overthrown on February 11, also agreed at a meeting with politicians to accept the resignation of Prime Minister Essam Sharaf's cabinet and to replace it with a national salvation government within days to steer Egypt to civilian rule.
We agreed on July as the month to transfer power to a civilian president, one participant, Emad Abdel Ghafour, head of the Salafi Islamist Nour (Light) Party, told Reuters.
He said a president would be elected in June ahead of a power transfer in July. Under the previous army timetable, the vote might not have taken place until late 2012 or early 2013.
Anger against the military council exploded this month after a cabinet proposal to set out constitutional principles that would permanently shield the army from civilian oversight.
Ghafour and other politicians at the meeting said parliamentary elections would start as planned on Monday.
The concessions have been wrenched from the military by five days of protests against army rule in Cairo's Tahrir Square and elsewhere amid violence that has cost at least 36 lives.
It seemed doubtful if they would satisfy the demonstrators, who again braved clouds of tear gas to converge on Tahrir Square to demand that the generals relinquish power immediately.
Fahmy Ali, one protester in Tahrir, said the concessions did not go far enough. We demand a full purge of the system and the removal of the military council, he told Reuters.
Protesters earlier hanged from a lamp post an effigy of Field Marshal Mohamed Hussein Tantawi, the 76-year-old army chief who served as Mubarak's defence minister for two decades.
Ahmed Shouman, an army major who gained fame as the first officer to join protests against Mubarak, returned to Tahrir to join the demonstrations. Ecstatic protesters carried him on their shoulders. Shouman was acquitted in a military court after his defection in February, but was suspended from service.
About 5,000 people also marched in the port city of Alexandria to join 2,000 already demonstrating against army rule outside a military command headquarters, witnesses said.
The unrest has knocked Egypt's markets. The benchmark share index has fallen 11 percent since Thursday, hitting its lowest level since March 2009. The Egyptian pound fell to its weakest against the dollar since January 2005.
In a stinging verdict on nine months of army control, rights group Amnesty International accused the military council of brutality sometimes exceeding that of Mubarak.
The United States, which gives Egypt's military $1.3 billion a year in aid, called for an end to the deplorable violence in Egypt and said elections there must go forward.
We are deeply concerned about the violence. The violence is deplorable. We call on all sides to exercise restraint, White House spokesman Jay Carney said.
Protesters singing and waving flags skirmished with security forces in and around Tahrir Square, where banners read Save Egypt from thieves and the military. As pungent clouds of tear gas set off stampedes, activists chanted stay, stay, stay.
Youth groups had called for a mass turnout to press demands for the military to give way to civilian rule now, rather than according to its own ponderous timetable.
TANTAWI UNDER FIRE
Come to Tahrir, tomorrow we will overthrow the field marshal! youthful protesters chanted, referring to Tantawi.
The powerful Muslim Brotherhood, which anticipates a strong showing in the election, was among five parties at the crisis talks with the military council. Three presidential candidates were also there, but a fourth, Mohamed ElBaradei, stayed away.
Youthful protest groups and some parties stayed away from the meeting between politicians and generals.
The revolutionary youth are not holding dialogue with the military council. The dialogue is going on in Tahrir Square, not behind closed doors with the generals, said Khaled Mardeya, a spokesman for the January 25 Revolution Coalition.
Beyond Cairo, violence has accompanied protests in the cities of Alexandria, Suez and Ismailiya, but nationwide demonstrations against army rule have yet to match the vast numbers that turned out to topple Mubarak.
In Tahrir, activists tried to control access to the square. Volunteers on motorbikes ferried casualties from clashes with security forces firing tear gas near the Interior Ministry.
The mood among protesters was determined. The real revolution begins from today, said Taymour Abu Ezz, 58. Nobody will leave until the military council leaves power.
Ahmad Gad, 20, a student, said: The people feel that Hosni Mubarak is still ruling. In Tunisia they already had elections.
Holding a sign that read Mubarak, leave, a 50-year-old English teacher named Mohammad Abdullah said: He's still in power. He just moved his HQ from the palace to the hospital.
Mubarak, 83, on trial since July for ordering the killing of protesters, has spent months in a military hospital in Cairo.
Political uncertainty has gripped Egypt since Mubarak's fall, while sectarian clashes, labour unrest, gas pipeline sabotage and a gaping absence of tourists have paralysed the economy and prompted a widespread yearning for stability.
Several banks in central Cairo were closed on Tuesday as a precaution against looting, the state news agency said.
Amnesty International said the military had made only empty promises to improve human rights. Military courts had tried thousands of civilians and emergency law had been extended.
Torture had continued in army custody, and there were consistent reports of security forces employing armed thugs to attack protesters, it added in a report.
(Additional reporting by Peter Apps in London, Marwa Awad, Omar Fahmy, Dina Zayed, Shaimaa Fayed, Tom Perry and Edmund Blair in Cairo, Abdel Rahman Youssef in Alexandria and Yusri Mohamed in Ismailia; Writing by Alistair Lyon; Editing by Jon Hemming)