Egypt's embattled President Hosni Mubarak announced Thursday he was handing his powers over to his vice president, Omar Suleiman, and ordered constitutional amendments.

But the move means he retains his title of president and ensures regime control over the reform process, falling short of protester demands.

U.S. President Barack Obama declared Thursday the world was watching history unfold and a moment of transformation in Egypt, as reports said President Hosni Mubarak may be ready to step down.

Obama also directly addressed the young people of Egypt who have swelled massive crowds in Cairo, saying America would do all it could to ensure a genuine transition to democracy at an apparently pivotal moment of the crisis.

Egypt's military said Thursday it would respond to the "legitimate" demands of the people as President Hosni Mubarak's regime tottered in the face of massive nationwide protests demanding his overthrow.

It was not immediately clear if the announcement spelled the end of Mubarak's 30-year-reign, the central demand of hundreds of thousands of people who have filled the country's streets in the two-week-old uprising.

Egyptian President Hosni Mubarak could "respond to the people's demands by tomorrow," the secretary general of his ruling party told the BBC on Thursday, as protesters demanded the strongman's departure.

"I expect the president to respond to the demands of the people, because what matters to him in the end is the stability of the country. The post is not important to him," Hossam Badrawi of the National Democratic Party said.

A Kuwaiti court granted bail on Thursday to Obaid al-Wasmi, an academic critical of the government, as the prime minister withdrew charges against three other critics, lawyers said.

"Today, I submitted a plea to the court to free my client, and Judge Adel al-Huwaidi accepted the request and ordered his release on $3,500 bail," Al-Humaidi al-Subaie told Agence France Presse.

Sudanese security services on Thursday arrested prominent government critic Mariam al-Mahdi, daughter of the prime minister whom veteran President Omar al-Bashir ousted in a 1989 coup, a member of her Umma party said.

Mahdi was arrested as she went with a group of activists to petition the security forces for the release of protesters detained nearly two weeks ago, Habab Mubarak, the daughter of another leading Umma party member Mubarak al-Fadil, told Agence France Presse.

Wael Ghonim, a Google executive who emerged as a prominent voice of Egyptian protests against President Hosni Mubarak, promised on Thursday to stay out of politics once the dissidents' demands are met.

The 30-year-old was freed Monday after 12 days in custody, and was swiftly propelled to the forefront of the popular uprising, addressing huge crowds in Tahrir Square, the epicenter of the protests against Mubarak.

Egypt's embattled regime warned of a military crackdown on Wednesday as massive protests demanding its overthrow spilled out across the country and deadly unrest flared in the remote south.

Hundreds of demonstrators marched on parliament from the epicenter of the uprising in Cairo's Tahrir Square the day after the largest protests since the revolt began, as other demonstrations erupted in cities across the country.

Egypt's embattled President Hosni Mubarak met a senior Russian envoy Wednesday amid mounting protests against his three decade-long rule over the Arab world's most populous country.

Mubarak met Alexander Sultanov, deputy Russian foreign minister and special Middle East envoy, at the presidential palace in Cairo, as thousands protested in the city's Tahrir Square and outside parliament.

Immigration officers have been instructed to bar Palestinians from entering Egypt, an official at Cairo airport said on Wednesday after 12 travelers were sent back.

"There are instructions to stop Palestinians entering Egypt. Twelve Palestinians were sent back to the places they came from on Wednesday," the official told Agence France Presse, on condition of anonymity.