What a mess.
After a day of mounting speculation that he would step down, Hosni Mubarak said he would defy "foreign interventions or dictates" and hold on to Egypt's presidency, outraging the crowds in Tahrir Square and foiling the Obama administration's hopes -- and gamble -- that the country would start transitioning toward democracy.
Instead, Mubarak said that after three decades in office he would yield some of his powers to Suleiman, who went on television shortly afterward to portray Mubarak's continuing rule as the logical step toward democracy and elections scheduled for the fall. Mubarak spoke vaguely of constitutional amendments, leaving it unclear which powers he would keep and which Suleiman would assume.
The crowds were furious, and they weren't the only ones.
"The Egyptian people have been told that there was a transition of authority, but it is not yet clear that this transition is immediate, meaningful or sufficient," Obama said in statement Thursday night. "The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democracy, and they have not yet seized that opportunity."
On Friday, the Egyptian military said it would back Mubarak's decision to remain in office and would lift the 30-year-old state of emergency as soon as calm returned. But tens of thousands of demonstrators spread their protests from Tahrir Square to the presidential palace and other government buildings.
Without specifically demanding Mubarak's resignation, Obama called on the Egyptian government to annul the emergency laws that stifle political opposition and offer a "negotiated path to democracy" that includes "meaningful negotiations with the broad opposition and Egyptian civil society."
"We therefore urge the Egyptian government to move swiftly to explain the changes that have been made, and to spell out in clear and unambiguous language the step-by-step process that will lead to democracy and the representative government that the Egyptian people seek," Obama said. "The Egyptian people have made it clear that there is no going back to the way things were."
This was neither what the Obama administration was expecting nor the clean move toward resolution it had sought for a strategic ally whose internal turmoil is a source of both potential opportunity and potential disaster for U.S. policy.
Throughout Thursday, U.S. officials hinted at an entirely different outcome.
Testifying before the House Permanent Select Committee on Intelligence in the morning, CIA chief Leon Panetta said, "There is a strong likelihood that Mubarak may step down this evening, which would be significant in terms of where the, hopefully, orderly transition in Egypt takes place."
A short time later, Obama, ahead of an economic speech in Michigan, told his audience that "we are witnessing history unfold."
"It's a moment of transformation that's taking place because the people of Egypt are calling for change," Obama said. "We'll have more to say as this plays out."
But after Mubarak's appearance on national television, White House spokesman Robert Gibbs said that the president watched the speech in the conference room on Air Force One while flying back to Washington and planned to convene his national security team at the White House when he got there.
The prospect of a Mubarak resignation had made it seem that after more than a fortnight of vacillating responses, Obama was betting on democratic change for Egypt and trying to place the U.S. on the side of the "young people who've been at the forefront" of the anti-Mubarak protests.
In all his remarks on Egypt since the protests began, Obama has emphasized the Egyptian youth, the generation that has never known an Egypt without Mubarak in charge and who organized and carried out the demonstrations that have resonated throughout the Middle East.
At stake in that effort are global perceptions of the U.S. that have been a key element in foreign policy and especially dealings with the Muslim world.
Should Mubarak, Suleiman and their people fall from power through revolution instead of evolution, the biggest American nightmare -- recalling the Iran's Islamic Revolution more than 30 years ago -- would be the surge of a popular movement that sees Washington as the hated backer of a failed dictator.
The White House has balanced support of the protesters' demands for Mubarak's immediate departure with the concerns of Israel, Saudi Arabia, Jordan and others who fear contagious, dangerous instability would follow.
But the tide of its tone shifted toward change as the anti-Mubarak sentiment this week spread from the demonstrators to workers who staged strikes across Egypt.
On Wednesday, Obama spoke with King Abdullah of Saudi Arabia and "emphasized the importance of taking immediate steps toward an orderly transition that is meaningful, lasting, legitimate and responsive to the aspirations of the Egyptian people."
Also Wednesday, Gibbs went so far as to say that "what we see happening on the streets of Cairo is not altogether surprising when you understand the lack of steps that the government has taken to address their concerns."
Many Republicans have essentially backed Obama's stance on Egypt.
Sen. John McCain late Thursday called Mubarak's announcement "deeply unfortunate and troubling."
"The voices of the Egyptian people are growing louder and more unified, and they are not demanding partial transfers of power or minor adjustments to the current government," McCain said. "I am very concerned that every day their demands go unmet, the possibility only grows that this hopeful call for change could be exploited by extremist or violent elements."
The disappointment over Mubarak's announcement is only likely to ignite greater, possibly fiercer protest, however much Mubarak painted himself as an ally of the protesters and their aspiration for change.
Much rests on that decision.
Sitting beside Panetta Thursday morning, James Clapper, the director of national intelligence, sounded almost optimistic about what he described as a "truly a tectonic event" in Egypt and "across the whole Mideast."
"And there are potentially a great opportunity here to come up with a counternarrative to al-Qaida and its franchises and what it is espousing," Clapper said.
But in one dramatic day, the story line shifted yet again, and the stakes for the Obama administration just got higher.

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