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JOHN KING, USA

Mubarak Does not Step Down; Anger and Confusion

Aired February 10, 2011 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, HOST: Thanks Wolf and welcome to our viewers here in the United States and around the world. I'm John King in Washington joined from Atlanta for the next hour by my colleague, Michael Holmes at CNN International. A dramatic night of breaking news, a critical and to be honest, a somewhat confusing night in the Egyptian political crisis.

There is anger in Tahrir Square and pro-democracy demonstrators promised already Friday morning there that this day will be a day of reckoning. This after President Hosni Mubarak delivered a lengthy speech on state television saying he was ceding powers to his hand- picked vice president, but making no mention of stepping down. The vice president followed with a televised address in which he told the demonstrators to go home, which made them even more angry, but Egypt's ambassador to the United States tonight tells us that we are understating the significance of this and that President Mubarak has ceded day-to-day control of Egypt.

Let's begin a packed hour ahead by going straight to Tahrir Square. Frederik Pleitgen is there and Fred, the ambassador tells us that this is a big step and that President Mubarak has ceded day-to- day power, but those pro-democracy demonstrators, they don't buy it, do they?

FREDERIK PLEITGEN, CNN CORRESPONDENT: No, they don't buy it at all, John. In fact they were very disappointed by this speech. They said it means absolutely nothing. And they say quite frankly they believe that millions of people could show up at Tahrir Square and other places around Egypt tomorrow, which of course is a very important day as it's Friday and we've seen among the biggest demonstrations. But we want to hear from some of the people who have been here. And many of you who were expecting Hosni Mubarak to step down today and he didn't.

UNIDENTIFIED MALE: He didn't. It was a big disappointment for each of us. Some people actually packed their things in a bag and they were just leaving. He said that he's leaving today --

(CROSSTALK)

UNIDENTIFIED MALE: And it was a big disappointment. (INAUDIBLE) lots of disagreements between Omar Suleiman and Hosni Mubarak about -- and the head of the military and they thought it was the end. Today he was leaving.

PLEITGEN: How disappointed are you?

UNIDENTIFIED MALE: Like 200 percent, you know, like maximum disappointment. Each one of us, it's not just me, you know? And people just expecting lots of things. If he stood down --

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

UNIDENTIFIED MALE: If he stood down like lots of people wanted, some of the people are sitting here at Tahrir Square was going to leave to their homes and wait for some bigger (INAUDIBLE) things to do, to be done.

PLEITGEN: A lot of this is also about the president having respect for the Egyptian people --

UNIDENTIFIED MALE: I think he is not having any respect to us. I think he -- he thinks that most of us are just fools or something because he keeps giving speech after speech after speech and none of these speeches (INAUDIBLE) no one realizes it.

PLEITGEN: What do you think it would take and we are right now, so many people are angry. Could this situation get out of control?

UNIDENTIFIED MALE: It's not going get out of control because we love this country and we are not here to destroy things. We're just peaceful. We keep saying that each (INAUDIBLE) we go. We are peaceful, we are peaceful and he didn't realize that the first time when he keeps shooting at us, sent folks to kill us with their camels and horses. I don't think it is going to be big destroying --

PLEITGEN: (INAUDIBLE) you guys are staying here, is that right --

UNIDENTIFIED MALE: We are staying here. (INAUDIBLE)

PLEITGEN: OK, thank you very much. As you can see, John, the people here still say they are very, very resilient, very disappointed obviously and I have to tell you I was here when Hosni Mubarak gave that speech. And after he was finished, I have just seen so many people who are absolutely speechless at what they heard here on the square -- John.

KING: Frederik Pleitgen is down on Tahrir Square. He will stay there and we will stay in touch with him. I just want to show you using our mapping here just how this is all playing out. This is Tahrir Square. You've seen the demonstrations here over the last couple of weeks. We were also told tonight that some of those demonstrators have left the palace, left the square area -- excuse me -- to go over to the Egyptian TV headquarters. This is where they are furious at the arms of the state being used for what they believe to be propaganda purpose tonight. Another thing we are watching is that some of the demonstrators also said they were leaving to go.

It's about five and six miles away from Tahrir Square to the presidential palace where Hosni Mubarak has been staying and where he recorded that address to the Egyptian people tonight. Let's turn now to our senior international correspondent Ben Wedeman, a man who knows Egypt as well as anyone in the business. And Ben, we have a confusing night here.

The Egyptian ambassador to the United States telling CNN that President Mubarak has indeed ceded day-to-day powers, but remains the head of state and you have been there all throughout this crisis. The people who want democracy now don't believe him.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, nobody believes it and certainly the tone of the speech was very presidential. There was not much contrition. He did express sympathy for your martyrs, referring to the -- possibly as many as 300 people killed since the beginning of these protests. Many Egyptians pointing out they didn't -- he didn't say our martyrs. And just the entire tone was that he would be giving up some of his powers, but essentially he remains president.

It was very much a speech in the first person of what I will do as president. I have instructed for the creation of committees. I will make sure that those involved in this violence will be investigated. So it just struck the completely wrong tone for what was expected. And of course most of the people in the square thought that he was going to, in some form, step down from the presidency, not essentially declare I am still your president.

MICHAEL HOLMES, CNN INTERNATIONAL ANCHOR: Yes, Ben, it's Michael here. I'm just reminding you there's live pictures there from Tahrir Square on the left of your screen. One other thing that he said just seems staggering given what we are looking at on the left of the screen, he said that national dialogue had started -- brought together all the young people who called for this change. All the other political forces and this dialogue resulted in some form of harmony. Is this -- is this president that out of touch?

WEDEMAN: Well certainly that would seem to be the case because what we've heard from those or most of those who have participated in this dialogue is that it really didn't result in much at all. That very little was ceded. That of course the fact that there was a meeting between opposition figures and Vice President Suleiman was really played up by the official media and put across as an achievement on the road to democracy. But for the most part, the people in the square in particular, but also the Muslim Brotherhood, the Waif Party (ph) and others, came out of those meetings disappointed.

HOLMES: Yes and you can't have this discussion without talking about the military. There seemed to be some pointers from some in the military that the requests of the protesters would be heard and resolved today, pointing perhaps to Mr. Mubarak stepping down, maybe not. But what are you seeing there in terms of some of the messages coming from the military and some of the reality on the ground. Is there a concern that -- or are you seeing any evidence that maybe there is some disagreement in what is a vital government institution?

WEDEMAN: Well what was interesting is that President Mubarak in his speech never mentioned the military. And of course it's the military that really stands between President Mubarak and the protesters. They're the ones -- it's the military that is basically keeping the protesters kind of encircled in Tahrir Square. They are protecting the presidential palace. The military put out a communique number one this evening, which in the Middle East that usually means you've had a military coup d'etat and that's the first announcement.

But -- and we're -- also we're told that at midnight the military would put out a second communique, communique number two, so very mixed signals. There was a point this evening where people were scratching their head trying to figure out who is in control. Has the military taken over? Is President Mubarak with Vice President Suleiman still in control, very, very confusing -- Michael.

HOLMES: All right, John.

KING: And Michael that is the confusion Ben Wedeman is describing and Ben also noted protesters going over to the palace. And we've (INAUDIBLE) word from one of our producers they're now getting close to the presidential palace. I want to use our map again to show people the perspective.

Tahrir Square where most of this is played out, we have also seen demonstrations over here where the parliament building is, but I'm going to take you now to the presidential palace, which as you see the line play out, it moves quickly, but that's about five, six miles away. And we are told the military has set up some barbed wire out here.

The question is, Michael, how long can the demonstrators keep their energy and we spoke to one, a 26-year-old Egyptian American, Sherief Gaber is his name. He was roughed up by the demonstrators a week ago -- remember when the police came in -- and the pro-Mubarak crowds came in and there was some violence in Tahrir Square. He was roughed up. Then he was back in the center of it today and listen to his perspective being right there in the middle of the tens of thousands as they listen to President Mubarak.

(BEGIN VIDEOTAPE)

SHERIEF GABER, EGYPTIAN-AMERICAN GRADUATE STUDENT: I was right in the middle of the square and they'd their speech piped in on several P.A. systems and a lot of people were listening on smaller (INAUDIBLE) and cell phones. And the reaction was just a mix of disappointment, anger, and just -- I mean it was not good I mean to put it briefly. I mean but (INAUDIBLE) really upset. I mean this was nothing. This was not even a concession and it was (INAUDIBLE) total speech, everything about it was just awful I think by any estimation.

KING: And so the question is now what? There are some Egyptian officials saying well the president might not have said it directly, but he has actually ceded a lot of power here and he is just stubborn and he wanted to save face. Does anyone there believe that?

GABER: I don't think anyone believes that for a second. I think that nobody (INAUDIBLE) kind of release of power out of his hands or those immediately around him. I mean I think that as much as he's loathed, I think the regime itself has just become just an object of loathing as well in its entirety. And you know we're just seeing the same reshuffling that we have been seeing for the past two weeks with every new speech and then just increasingly just more of the condescension from them, you know this belief that these people have no, you know presumable right to be here or whatever. I mean there's nothing given.

KING: And so the question then is if nothing is given, what will happen next?

GABER: There is -- no one is sure. I mean I think that he has basically invited disaster on this country. I mean I hope that I am wrong in that respect. But there is a lot of anger and there is a lot of talk. I have heard reports already that a sit-in has formed around the TV building which is heavily, heavily lined with tanks and of army presence there, so I don't know what's going to happen. People were talking about marching to the presidential palace as well tomorrow and you know the -- when this happens, you know I just have no idea. I mean the army has proven itself completely erratic as well, again, you know there's no kind of telling what they might react to or how they might react if the TV building were attempted to be occupied or if people march on the presidential palace. It's just totally up in the air right now.

(END VIDEO CLIP)

KING: Live pictures there of Tahrir Square. That was 26-year- old Sherief Gaber and Michael Holmes, as we watch these live pictures, and as you hear a young man say something like that -- matter of fact saying he believes President Mubarak has brought disaster upon his country and also saying well the military has acted erratically and we're about to find out who they stand with as these demonstrators go on, you get a sense of foreboding heading into this Friday.

HOLMES: Exactly. I think he touched on a vital point and that is that the military has not had to confront the protesters yet, confront being the operative word. They've separated pro from anti to a degree. There has been some action on the military police, actually detaining protesters, but by and large they've been the people's army as some of the protesters have been calling them, of the people. They haven't had to confront the protesters.

Now if you've got people marching to the palace, marching to the TV station and the military is there protecting those institutions, the military is then faced with a very stark choice depending on what those protesters do. Do they go down the road of using force to keep them out of those buildings? That then changes the whole dynamic of what is going on.

KING: That certainly would and as we watch those live pictures and as we watch the demonstrations unfold in Egypt, it also poses a big question for the president of the United States, what now. The White House was told this morning that President Mubarak would resign and we are told tonight President Obama is preparing to issue a statement. We're tracking that story and more, but what are the U.S. options and what is unfolding in Egypt? We'll be back in just a moment.

(COMMERCIAL BREAK)

KING: Live pictures, that is Tahrir or Liberation Square in Cairo. Crowds still the thousands there, even though is early morning Friday, those protesters disappointed and furious. They thought their president, Hosni Mubarak, was going to resign this evening. Instead while he did cede some powers, he gave no indication he is prepared to step aside.

I'm John King in Washington joined by my colleague Michael Holmes in Atlanta from CNN International. Questions as to what will happen, what the demonstrations, what route they will take on this Friday in Egypt. Also questions for what the United States and other governments around the world will do now. For that part of the conversation we're joined by Nicholas Burns, the former under secretary of state. For political affairs here in Washington, David Gergen is with us, our senior political analyst and a former presidential adviser as well as Joe Klein, "TIME" magazine political columnist who writes about the Egypt crisis in this week's magazine.

And Nic Burns, to you first -- I was talking to senior U.S. officials this morning who said they were told by what they called ranking and reliable sources in the Egyptian government that President Mubarak would resign. The president of the United States himself went out publicly and said we are watching history here. President Mubarak obviously has ceded some powers, but he has not stepped aside. What does the United States do now?

NICHOLAS BURNS, FORMER UNDER SECRETARY OF STATE: I think the president and the White House have to be sorely disappointed by these events because that was a very confusing and very ambiguous statement by President Mubarak. So I think what the White House needs to do right now is push Vice President Suleiman to make this transition move forward at a much faster clip.

Open it up to some of those peaceful protesters and political forces who want to see Egypt change and to do that quickly because if that cannot happen I expect massive demonstrations in the streets of all the Egyptian cities tomorrow further pressure from the people of Egypt for real change (INAUDIBLE) change. And so I think that this is an opportunity now for President Obama to be very clear that the United States does support reform. We support the right of people to protest peacefully and we want to see this process go forward. The president has had, as we've talked about John before, he's had to juggle competing priorities. I think now he needs to work a lot harder behind the scenes on Vice President Suleiman.

KING: (INAUDIBLE) and I am told there are lawyers looking these papers over at the State Department tonight. And they're analyzing both speeches and some people in the administration believe that the U.S. ambassador to Egypt is correct that President Mubarak did cede more powers than it would have seemed if you were listening to him, but David Gergen, if you've listened to all of our correspondents down in that square today, they think now that Vice President Suleiman, who they didn't love to begin with, but they thought could possibly be a transitional figure, the sequencing of events, long speech by Mubarak doesn't step aside, speech by Suleiman saying go home to the demonstrators. Has he now lost any credibility he might have had as the bridge?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Yes, I think basically so. And I think we've moved beyond sort of legal distinctions now. This has become a power struggle, not a legal struggle. And I think in effect Mubarak went over the edge today. He clearly is not going to be able to stay in office much longer. I don't know how this is going to end. I think Nic Burns is right.

We're likely to have very massive demonstrations tomorrow. There is a good chance of blood shed. I think there's a fair chance the army is going to step in and get rid of Mubarak. But I think this is an opportunity for President Obama and I hope he takes it. Because you know we have been sort of for the protesters, but we have also been very much for an orderly transition.

I think this is an opportunity for him to come down much more firmly -- I think he has to do it quickly -- much more firmly on the side of the people should be listened to here. Their voices matter. And we're not going to work with Mubarak anymore. We're going to work with the army, but we're going to ensure that there is a solid transition, but toward democracy.

HOLMES: David, it's Michael Holmes here. Joe Klein, can I bring you in on the conversation here? It's interesting the military is everything (INAUDIBLE) going to have a conversation about Egypt. With an institution that has such power and standing in a country for so many years it is not likely they are going to sit back here and just go with the flow. I mean in either way we are going to have a very different looking Egypt in a few weeks, a few months even.

JOE KLEIN, POLITICAL COLUMNIST, TIME MAGAZINE: I think that the military is the flow in this case. And I think that, you know, what Nic Burns said before is right. This was a very -- we've had -- the Egyptians blew it and in my conversations with U.S. officials, we had to thread a needle in this case. What they wanted was for Mubarak to move out of the field of play, move off the field of play. They were not asking -- we were not asking for him to resign and there were constitutional issues there.

In the Egyptian Constitution if he resigns you have to have an election in 60 days and not even the demonstrators think that they're going to be prepared for an election building political parties and so on in 60 days. So they had to have the guy you know kind of as a fig leaf head of state until September. But you know they blew the announcement. You know dictators aren't very good when it comes to sending messages except you be quiet.

UNIDENTIFIED MALE: Yes.

KLEIN: And in this case the person who should have sent the message was the vice president who should have said President Mubarak has stepped aside. He's gone back to Sharm el-Sheik. He will -- he will pursue his constitutional powers from there, but I am running the government.

HOLMES: Do you think -- do you think that the army was blindsided in a way or at least some elements of the army? And what is the potential --

KLEIN: No --

HOLMES: -- for disagreements within the military?

KLEIN: I think that everybody was on board with what was supposed to happen here, which was that Suleiman was supposed to take over with the exception of a few constitutional powers that Mubarak had. That would you know enable Suleiman to say we are not having a coup here, the army hasn't taken over. That's why the army met all day today and I think that the understanding was on our side in our government was that in effect Mubarak was stepping aside. He wasn't going to run things anymore.

Suleiman was going to run the transitional process. But when you put Mubarak in front of a microphone and by the way I'm not sure watching this whether it was just a really lousy translator or the fact that Mubarak was stumbling around in the speech and wasn't quite sure of what he wanted to say.

GERGEN: He might have been drunk.

KLEIN: Yes, well you know spoken as a former Nixon staffer there --

(CROSSTALK)

KLEIN: -- from Dr. Gergen.

KING: So this -- so this begs the question and Nic Burns I want to go to you first because of your experience with difficult and delicate diplomacy. Joe Klein just spoke of the United States was trying to thread a needle and you and I have been talking about this over the course of the last 10 days or so. If threading the needle has not worked and we are now at this point, what is the president's option now? Does he need to get a club and be forceful in a public way? Or does he need to step back out of the way knowing that anything he says, you heard President Mubarak and the vice president say outsiders are trying to interfere in our business.

BURNS: Right and I think, John that the president needs to do two things, continue doing two things, but maybe just more forcefully. He's right to suggest, he President Obama, this is not about us. We can't be in the middle of this drama. The Egyptians have to move forward. But a firm declarative statement which we might get tonight that the United States supports democracy and the route to reform and the right of people to protest.

And in addition to that, the president and the secretary of state and others obviously will have to make it very clear to Vice President Suleiman that a slow transition that seems to be just a game of musical chairs, where the people change, but they are the same people who were in the Mubarak government is not going work when you have hundreds of thousands of people in the streets of the major cities of Egypt and you will have more tomorrow.

And so I would think and a more forceful American position behind the scenes and a ringing declaration of support for reform is probably in order now. Because the president I think rightly has tried to give the play to the Mubarak government and the Mubarak government has not been listening as much as we would have liked.

KLEIN: Yes I think the other thing -- Nic is right about that.

KING: We're going to lose Nic's satellite feed, so if Nic disappears to our viewers don't be concerned --

(CROSSTALK)

UNIDENTIFIED MALE: (INAUDIBLE)

KLEIN: Yes --

(CROSSTALK)

KLEIN: But I think the other thing we wanted aside from some kind of acknowledgement that Mubarak was going to move off the field of play was we wanted them to lift the state of emergency, which would do many of the things that I think Nic Burns was just talking about and if we haven't lost Nic I wonder if you think that that's right.

BURNS: I think it is -- John as you know, and I really think highly of what the administration has been trying to do. But you have this image now of an authoritarian government refusing to budge, making progress inch by inch not mile by mile as this dramatic situation would dictate. And so I don't think the administration needs to entirely change its policy, but we certainly need to make it clear to the people remaining in power that what they are trying to do is not going to work and the people won't support it --

KING: We just -- that's Nic's satellite. We just lost that right there. What we will do here is take a quick reset. David Gergen is still with us. Joe Klein is still with us. My colleague Michael Holmes in Atlanta with us -- live pictures there from Tahrir Square, protests still gathering. They promise a day of reckoning after President Mubarak did not step aside, though he did cede some powers. Our continuing coverage for our viewers here in the United States and around the world continues in just a moment.

(COMMERCIAL BREAK)

KING: Live pictures there of Cairo's Tahrir or Liberation Square. By the thousands pro-democracy demonstrators are still there, furious their president, Hosni Mubarak, went on state television tonight and ceded some powers, but did not step aside. They promise massive demonstrations once day breaks. It is already early Friday morning in Egypt.

We are also told demonstrators have made their way not too far from that spot to the state TV building and about five miles away to Hosni Mubarak's presidential palace. I'm John King in Washington joined by my colleague Michael Holmes in Atlanta and Michael, obviously early morning hours in Cairo. But by the time the sun comes up we will know a lot more about the depth and the energy behind this young revolution.

HOLMES: Yes and confusion over what Mr. Mubarak said and what the people expected him to say will have perhaps coalesced him to something. We don't know what as yet and the night is still not over. We got people marching towards the palace, the TV station, what the military might do as they are there is yet to be seen.

And David Gergen, talking about the military, even despite what happens in the next day, two three, let's go through to September. There is an election. Do you really think that the military, with so much invested in their own position within Egyptian society, are going to be good stewards and stand back and let a truly democratic, a truly civilian government run Egypt?

GERGEN: We don't know for certain. I think there are so many uncertainties attached to all of this, but what we do know, so far is, that the military has played this, I think, in a way that the United States has come to appreciate. While they have been loyal to Mubarak and his regime, they have been very restrained. This has been largely a set of peaceful demonstrations, amazingly so, given the numbers and the potential for clashes here. And they've held back. Now they may go over the brink. If they -- these massive demonstrations turn really ugly on Friday, they could go over the brink.

HOLMES: That's what we're saying, David. They haven't had to confront the people yet. And what we're seeing now is the potential for that to happen.

GERGEN: Yes, I-

KLEIN: I think it's clear that they don't want to, though. One event that we keep on passing over, a very important one is that the commander general of the Egyptian army went to Tahrir Square, earlier in the day, and with a megaphone he told the protesters you will get everything you want tonight. Which is clearly what the military thought was in the works. Now, where they may have to step out is that same general may have to get on TV, with a couple of other generals next to him and say, here's the deal. We're sending Mubarak home. Suleiman will be in charge. And we're going to have an election in September.

KING: That is the defining question. Did the general go to the square with the best of intentions and believing that that was the case, that President Mubarak was going to step aside. Or was it part of this design, the stall tactic?

And one of the interesting questions we've talked about, what has President Obama said during this crisis. Secretary Clinton, who has had a lot of diplomacy to do in this crisis. Perhaps the most important player at the moment is someone we have heard very little from which is Defense Secretary Robert Gates, who has been on the telephone many, many times to his Egyptian counterpart, urging that restraint Michael Holmes was talking about.

The question, David Gergen, is if-if, if the demonstrators are at the presidential palace, at state TV, they are in record numbers in Tahrir Square tomorrow, and if the interior ministry tries to send in the goons, then the military may have to make a choice.

GERGEN: It may have to make a choice. But I would argue that the military would not have made that statement today in bad faith. I don't think they were part of manipulation. Because what clearly this series of events today has really whipped up the people on the streets. It has made them furious, far beyond anything we've seen so far. It is going to get the numbers up. I don't think they would have put themselves in that trap.

And what I keep coming back is that they said very firmly today that they would not allow this country to be ripped apart. And my bet is that instead of engaging in violence, that they are going have a soft coup and get Mubarak out of there.

KING: Yeah.

HOLMES: There seems to be, and John, I don't know if you agree, there seems to have been so much confusion about what everyone thought Mr. Mubarak was going to say and what he actually did. I remember we had on earlier, Hossam Badrawi, who is the democratic party, new leader, and he said, his words were, I know it is difficult for him but I think I convinced him to stand down. And we have heard this from the general. We heard this coming from U.S. sources as well. Did people feel that he just -- Mr. Mubarak just decided at the last minute he was going to stay? Or did he think that handing over power but remaining as a figure head, a de facto president, was going to win the people over?

KING: That is a fascinating question. As we wait to hear from President Obama, Joe, let's jumped to that for one second. When I talked to people this morning they have been very careful about this. Because they keep getting conflicting messages, they keep getting murky messages. But they were convinced, at the highest levels of the administration, and they say they were being told by, ranking, important, and reliable, important, officials in the Mubarak regime that they expected the president to yield power and get out of the way. Now they did not use the word resign. And there are constitutional questions and legal questions about that. But they were expecting a clear statement that, I'm done. The vice president will lead the transition. I'm stepping out of the way. And they are disappointed tonight, I'm using a mild language, that they did not get that. The question is what comes now.

KLEIN: Those were in there. Those words were actually in the speech. But you know, this is a guy who doesn't know how to talk to his people. This is a dictator. Remember how he starts this thing off, you know, I-he's speaking as a father to the sons and daughters of Israel-Egypt, excuse me. He is patting them on the head and, you've won, go home, because I say so. And clearly, the guy is living on Mars. GERGEN: I want to hit one other thing. I don't want to engage in too much psychobabble, but I do think the Nixon example is relevant, having been there. People who are in power in the situation can become very, very erratic. And nobody knows exactly what they are going to do next. One just reads this as there is something that went terribly wrong today. It sounds to me like given that rambling nature of the speech that it may be something he personally did. And they are still going to figure out a way to get him out of there.

KING: It is interesting, because I was talking to General Michael Hayden, the former director of the Central Intelligence Agency, earlier today, and Michael he made that point. He said in his last meeting with Mubarak, he is having a conversation and Mubarak is obviously a friend of the United States and they're having a perfectly good dialogue. They have eye contact. When he gets around to the point that, you know, your people are very mad at you. You need to have more reforms, he says that Mubarak just essentially glazes over. He loses eye contact. He is off in his little daydreaming world for a little bit. And then when he is done with that little part of the speech, Mubarak comes back to the conversation. He said, essentially, this is a leader who is just in denial about these issues and just refusing to listen.

HOLMES: Yes, and at the end of the day, the key thing is going to be this may all be moot. And what people are looking for on the streets there in Tahrir Square is the free and fair election. The democratic, civilian, secular government and that's the key thing. Is that going to be seen in September, even if everything goes great?

KLEIN: They have to lift the state of emergency. That is the absolutely most important thing that has to happen now. Because without that, political parties can't organize. They can't meet in public. There is no freedom. And to have an election you have to have a certain amount of freedom.

KING: The Obama administration has been reluctant, publicly, to play the aid card, which is the greatest lever that it has. And most of that aid goes to the Egyptian military. Is that a public card you play now, or is that something you need to hold because of the uncertainty?

GERGEN: I think you hold. Very much hold right now. We need the military to come through for us on this. You do not want to play that card at this moment.

KLEIN: We're playing the aid card.

HOLMES: That could backfire, could it not? Could that not backfire, Joe, right now?

KLEIN: Absolutely.

HOLMES: The Saudis could step in and say we will give you $1.3 billion. And meanwhile, the U.S. has lost any-

KLEIN: No, no, no. I don't think that that would be good. Because I think that we provide a lot of spare parts and expertise and logistics and things like that. We are playing the aid card. I'm sure that it's in the background of every military-to-military conversation that has been going on over the last 14 days. How is that new piece of equipment, we gave you last week, working out?

KING: All right. We will continue our conversation. Joe Klein, David Gergen, with us, my colleague, Michael Holmes, in Atlanta. When we come back we will go right back live to the correspondents in Cairo. A dramatic night, protesters still in the streets. They promise a day of reckoning this Friday already it is in Egypt. Furious their president was trying to cling t power. (COMMERCIAL BREAK)

KING: I'm John King in Washington . Pictures, there, of the demonstrations in Egypt, Cairo, exactly, earlier today. If you are just joining us, here are this hour's latest developments in the fast evolving crisis in Egypt.

There is massive anger tonight in Cairo's Tahrir Square; demonstrators also outside Egypt's presidential palace and the state television building. Massive protests are expected Friday. It is already early Friday morning in Egypt. All because the President Hosni Mubarak went on state television a few hours ago saying he plans to stay in office until his term expires in September.

However, after his speech, Egypt's ambassador to the United States told CNN, Mubarak has effectively transferred nearly all of his powers to Vice President Omar Suleiman. Suleiman also went on Egyptian television tonight telling protesters, quote, "Go back to your houses, go back to your work. The homeland needs your work."

Even though it is after 2:40 in the morning now, Friday morning, in Egypt. It is clear that many people have not listened and have not gone home. They are still angry. CNN's Arwa Damon joins us from Cairo.

Arwa, a remarkable sight.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: John, it most certainly is. What was just as remarkable and tragic was watching the mood at the demonstration site change after Mubarak's speech. It started out fairly festive, people really optimistic that finally this revolution that was started out by a youth group on Twitter and Facebook was going to accomplish the unthinkable, that the president would be announcing that he was stepping down. And then as he spoke, his words truly ringing hollow to the crowd down in Tahrir Square. We saw people's expressions changing into ones of sheer shock, horror and despair. Some people even crying.

And then pure rage when his speech came to an end, saying that no matter what concessions he was making, what constitutional amendments, any sort of pledges, that just wasn't enough. And when it comes to the issue of Omar Suleiman taking up the reigns of power, many of these people down at the demonstration site will tell you that they actually do not find that acceptable. They say they initially supported the notion that Suleiman would leave the country through a transitional period, but after his recent speech where he said, on national television, that Egypt wasn't ready for a democracy they now do not feel he is the man to even lead them through this transitional period. Many people down there reiterating what we have heard so many times in the past. They are calling out the masses. They are willing to stand their ground, they are willing to die for this cause, John. They say that too much blood has been shed for all of it to be in vain.

KING: And Arwa, when you say that, that they are willing to die. Do they expect a crackdown? There was a crackdown a week ago, then the government pulled the police off the street. The secret police of the street, and the military stepped in. What do those on the ground as they promised this big day, when daylight comes, this Friday in Egypt, do they expect the government to crackdown, or do they expect the military to take their side?

DAMON: Well, John, they most certainly are telling us that they are expecting the worst. Many people who were we speaking to saying that this speech by Mubarak was a deliberate one in its tone, in its message, and what many were calling its condescending and derogatory attitude to try to provoke these demonstrators. They say that they knew that after the speech Mubarak and the military both knew that the demonstrators would be provoked. They would be showing up en masse and there were great fears out there that this would be used by the regime to try to enforce some sort of a crack down in the name of national security.

The demonstrators, themselves, insisting that they will maintain a peaceful stance. But there is very little, if any, faith in this government, in President Mubarak. Even though we have been seeing the military in this so-called neutral role, if it can even be called that, people expect them to turn on them at any moment, John.

KING: That's a foreboding thought, there. Arwa Damon, live for us in Cairo. Michael Holmes, my colleague joins me in Atlanta. We try to stay objective in these stories but when you listen to President Mubarak saying the foreigners are stirring this up, and satellite stations are stirring this up. And you know from all of our fabulous correspondents who have been down there with the people. This is working class Egyptians, middle class Egyptians, professional Egyptians. Yes, sure, some people who might be aligned with the Muslim Brotherhood, but this goes across the Egyptian society. It is an indigenous revolt, not a foreign inspired revolt. And over the next 24 hours, or so, I suspect we are going to learn just how deep it is, and how broadly it goes across the society.

HOLMES: Indeed, John, and concerning, I suppose, again to hear Mr. Mubarak pushing that button of nationalism, if you like, wrapping himself in the Egyptian flag and blaming everyone else for what is going on, and outside forces, agitators. In the past he has blamed Israelis, Hamas, the satellite TV stations, essentially us.

Fred Pleitgen is down on the street there. Last time we heard the regime blaming the media and outside forces, journalists got beaten up. Are you getting any sense of anger at anyone other than the Mubarak regime, Fred? FRED PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: No, certainly not where I am. I'm still down here on Tahrir Square, and really the only people that people hear are angry at are Hosni Mubarak and his vice president at this point in time. Again, it goes back to what Arwa just said a couple of minutes ago. They just felt that the whole speech was absolutely derogatory. That he was treating them like they were children. And quite frankly, that he hadn't understand what the people here were really thinking. First of all he called it the youth movement. I mean, there is not really that many young people here I mean there are a lot of people who are in their 30s and 40s., they say they are very well capable of making decisions here.

And really people tell me that they believe tomorrow is going to be an absolutely key day. They think it could very well be that these will be the largest crowds that we have seen so far. Certainly what I'm seeing right here, on Tahrir Square, right now, Michael, is that it is still absolutely packed. There are still a lot of people who are here and who say they are staying until Hosni Mubarak leaves office.

I'm seeing some people who are sleeping on the tarmac here, on the asphalt of this square and certainly it shows no sign of letting up. They say they are going to stay here until Hosni Mubarak stands down. This is certainly not the last word that has been spoken in all of this, Michael.

HOLMES: As you said, Fred, a very important day tomorrow.

Fred Pleitgen down there among the people in Tahrir Square, keeping an eye also we have people keeping an eye on what is going on outside Tahrir Square, with reports of protestors heading to the palace and heading down to the television station, well, state television. These pictures earlier in the evening.

We're going to take a short break here. John King and I will be back after that.

(COMMERCIAL BREAK)

KING: I'm John King in Washington. I'm joined by my colleague Michael Holmes at CNN International in Atlanta. We're watching dramatic developments in the Egypt political crisis. You see on the wall behind me, here's the map, Tahrir Square in Cairo. The Egyptian TV and radio headquarters over there; there are Demonstrator at the state TV. There are demonstrator by the thousands here, and five or six miles away at the presidential palace, demonstrators, as well, demanding Hosni Mubarak yield power and resign immediately.

We were also told tonight, in Washington, to expect a statement from President Obama. We're told that will be a written statement. The president will not be speaking tonight. We've been waiting for several hours for that. This, as the administration's position has to take yet another turn. Let's go back in time and look at the very important and some would say ragged evolution of the administration's position. A little more than a week ago President Obama came out. The protester had been in the street. He sent his message to President Mubarak. And President Obama, at that point, has just hung up the telephone with him, he said his message to President Mubarak was you must plan to go quickly.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What is clear and what I indicated tonight to President Mubarak, it is my belief that an orderly transition must be meaningful, it must be peaceful, and it must begin now.

(END VIDEO CLIP)

KING: By the weekend, however, Secretary of State Clinton was acknowledging that things might take some time, and that perhaps even as he made some concessions, President Mubarak might stay in power a bit.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: There are risks with the transition to democracy. It can be chaotic. It can cause short- term instability. Even worse, and we have seen it before, the transition can backslide into just another authoritarian regime.

(END VIDEO CLIP)

KING: But then the administration got frustrated. It believed the Egyptian government was not doing the necessary outreach to bring in the protesters. The White House press secretary saying the Egyptian government needed to do more quickly.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: More has to be done. And I think more importantly, the people of Egypt think more has to be done.

(END VIDEO CLIP)

KING: Then the president earlier today at a time his administration was being told, I am told by Egyptian officials, that President Mubarak would resign, the president did not directly address that, but he seemed to indicate that was about to come.

OBAMA: We are witnessing history unfold. It is a moment of transformation that is taking place because the people of Egypt are calling for change.

(END VIDEO CLIP)

KING: President Mubarak, of course, did not resign. He did cede some powers and just moments ago the White House released this statement. I'll read some of it to you, the we'll get back to our conversation. "The Egyptian people have been told there was a transition of authority, but it is not yet clear it is immediate, meaningful or sufficient. Too many Egyptians remain unconvinced the government is serious about a transition to democracy and it is a responsibility of the government to speak clearly to the Egyptian people and the world. The Egyptian government must put forward a credible, concrete, unequivocal path toward genuine democracy and they have not yet seized that opportunity."

I'll continue to read more of the statement, but Michael Holmes, when you bring this in, that is a clear nudge from the Obama White House, yet again, saying the Egyptian government has failed its test to be credible, transparent, quick and orderly, in getting a transition plan in place that is acceptable to the demonstrators. The question is, will the Egyptian government listen?

HOLMES: Exactly, I thought one word that leapt out as you were reading that, John, was the word "meaningful". A lot of people on the ground in Egypt, in Cairo, in Alexandria and Suez and other parts of that country are going to wonder whether what happened today was indeed meaningful, or a little shuffling around the power.

Mr. Mubarak still is the president of Egypt. That's been the primary demand of the protesters, that he go. And his vice president, Mr. Suleiman is seen as a crony, as a compadre, if you like, of Mr. Mubarak. They don't see a whole lot of difference between the two.

Whether, if Mr. Mubarak had made these statements a couple weeks ago and passed off this level of power to Mr. Suleiman we might not be having this conversation now. That might have placated the crowd. He's certainly seen as a man who is seen as very able, and perhaps with the ability to steward this through to those elections in September. But as you said, a lot of little to little too late, I think.

KING: And it is interesting because you make excellent points. Remember we were talking earlier about President Mubarak was defiant, saying foreigners were trying to dictate what was happening, and the like. And the "satellite channels", I think, it was the vice president used those words. Essentially, outsiders were forcing this.

Here is a direct rebuttal from the president of the United States.

"We've seen young and old, rich and poor, Muslim and Christian join together and earn the respect of the world through their nonviolent calls for change. In that effort, young people have been at the forefront and a new generation has emerged."

David Gergen, that is the White House essentially saying, President Mubarak, cut it out.

GERGEN: Cut it out. But they haven't said go. And I thought tonight, and I don't think they're going to, either. I thought tonight, I would have to look at this statement more closely. But my sense tonight was, as someone who believed very much in what they were doing about an orderly transition, that tonight they needed a more ringing declaration that Mubarak is finished. We take the Egyptian government at its word.

KING: One second, because we have on the telephone, Sameh Shoukry, who is the Egyptian ambassador to the United States. He joins us from the embassy in Washington.

Mr. Ambassador, good evening. Thank you for calling in to us.

The White House saying yet again, the Egyptian people have been told there was a transition of authority. Yet to see any evidence; is it immediate, meaningful or sufficient?

SAMEH SHOUKRY, EGYPTIAN AMBASSADOR TO U.S.: I know you said earlier, to my colleague Wolf Blitzer that you believe the president had made a dramatic concession of power. President Mubarak clearly, the United States government does not believe that. Clearly the thousands in the streets of your country do not believe that. Will your president go back before the people and be more clear that he is stepping aside?

Again, Mr. King, I can only reiterate what I had said before in terms of the interpretation, the clear cut and categorical decision of a president to transmit all the authorities of the office of the president to the vice president. That is contained in the speech. And it will be for the Egyptian people to indicate whether that meets their demands. They will be accorded the freedom of demonstration and expression of their opinion. And there have been various guarantees that would be the case.

KING: Do you believe, as part of the demands, is to suspend the emergency rule that has been in place for nearly 30 years? Will your government do that? And will it do it as the sun comes up in Cairo?

SHOUKRY: I have no information related to that other, than the consensus that was arrived and the dialogue that Vice President Suleiman had with the opposition was in agreement by all the opposition parties. That the emergency law would be suspended under the-when the security conditions allowed so. This was agreed to by all the opposition parties.

HOLMES: Mr. Ambassador, if could I jump in here. I'm curious, if he handed over the powers substantially handed them over to vice president, Mr. Suleiman, why did he stay? Why did he not step down? Explain the thinking behind that. If he is only, why not step down and solve this?

SHOUKRY: Again, I'm not in a position to speculate what the president might or might not be thinking. He did transfer power to the vice president. The vice president is effectively now the de facto president. He is undertaking his responsibility. He is managing both issues to the internal and external situation and well- being of Egypt and its population. And he will conduct the office of the president in all areas of authority.

KING: Ambassador Shoukry, we thank you for your perspective. We hope you'll stay in touch in the days ahead. Clearly there is considerable confusion about what this decree means.

I want to thank my colleague Michael Holmes, in Atlanta, as well, for being with us tonight. And David Gergen and Joe Klein for spending the hour with us. Very important night in the Egyptian political crisis; a very confusing night in the Egyptian political crisis.

CNN's coverage will continue throughout the hours including on PARKER SPITZER which starts right now.