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Embattled Egyptian President Hosni Mubarak reiterated his pledge to stay on as president until the next election, disappointing the tens of thousands who had gathered expecting him to announce his resignation.

The move enraged protestors and has many experts fearing the situation could escalate into violence.

"Day after day we will continue the transition of power from now until September," Mubarak said in a speech on state TV. "Egypt will remain until I surrender it to others."

He said he would transfer partial power of his presidency to his vice-president, Omar Suleiman. He added he would lift the hated emergency laws when then situation permits.

Mubarak said he would stay in the country and was "adamant to continue to shoulder my responsibility to protect the constitution and safegaurd the interests of the people ... until power is handed over to those elected in September by the people in free and fair elections in which all the guarantees of transparencies will be secured."

Mubarak addressed the "youth" of Egypt in his speech, saying he was grateful that they were calling for "change for the better" and said their concerns were legitimate.

The tens of thousands gathered in Tahrir Square watched in stunned silence at first and when they realized he was not resigning, they began chanting, "Leave, leave, leave."

Some erupted in anger, some crying and others threw their shoes in the air as a sign of disrespect. Several hundred thousand had packed into the square, and organizers are calling for even larger demonstrations on Friday.

The Egyptian president also said he would investigate and punish those responsible for the deaths of protesters.

Suleiman delivered his own speech after Mubarak, telling protesters to go home and help rebuild the country.

He said the nation needs to unite and look towards its future.

But many worry the situation is going to break into violence.

Nobel Peace laureate Mohamed ElBaradei, who is supported by many of those behind the protests, sent out a Tweet warning, "Egypt will explode."

"The army must save the country now," he said. "I call on the Egyptian army to immediately interfere to rescue Egypt. The credibility of the army is on the line."

Army has decision to make

Mubarak appeared to be on the verge of resigning after the army stepped in to "safeguard the country."

Mubarak's defiant decision to stay on puts the army in a difficult spot, who will probably see even more demonstrations on Friday, and may be forced to side with either the people or the government.

Marco Vicenzino, the founder and director of Global Strategy Project, said there are divisions within the army itself about what to do next.

"There's generational differences between the older officer core who basically owe their careers to Mubarak and the middle and lower officers . . . who are looking towards the future, and Mubarak is not part of that future," he told CTV's Power Play Thursday.

The news of Mubarak's address came hours after Gen. Hassan al-Roueini, the military commander for the Cairo area, told protesters Thursday that "all your demands will be met today."

Al-Roueini made his announcement in Tahrir Square, the area in central Cairo where protesters have held mass demonstrations for the past 17 days as they try to oust Mubarak and his regime.

Protesters carried al-Roueini on their shoulders and marched around Tahrir Square shouting "the army, the people one hand."

The raging protests have left Egypt's capital city in a state of turmoil as the 82-year-old Mubarak and his government have tried many tactics to end the unrest.

Since the protests began on Jan. 25, the Egyptian president overhauled his cabinet, appointed a vice president and pledged not to run in the election later this year.

But the defiant protesters have stuck to their guns and insisted that Mubarak must leave power immediately.

On state television, the military's supreme council announced Thursday that it supported "the legitimate demands of the people" in Egypt.

Footage on TV showed the council meeting without Mubarak, his military chief, or Suleiman being present.

Time magazine correspondent Abigail Hauslohner told Â鶹ӰÊÓ Channel that there are reports Mubarak has already handed power over to the Egyptian military and will step down on Thursday.

CTV's Washington Bureau Chief Paul Workman said many Egyptians are growing concerned about what will happen as Mubarak steps down from power.

"I think what people are concerned about and very worried about is that the army will step in -- it is taking a much stronger role it seems," Workman told Â鶹ӰÊÓ Channel from Washington on Thursday.

Workman said the sense is that Egypt could see a period of "momentous change" over the next few hours and there are a lot of unanswered questions about what will happen to their president.

"Where will President Mubarak go, will he leave the country? Will he move to Sharm-el-Sheikh to his house there? What will happen inside the presidential palace? Will Omar Suleiman, who is now the vice president, will he in fact become the new president or will a general start running Egypt?"

CIA Director Leon Panetta said U.S. intelligence indicates there is a "high likelihood" that Mubarak could resign by the end of Thursday.

Mubarak took power in Egypt in October 1981, after former president Anwar Sadat was assassinated.

He had served as Sadat's vice president and took the slain president's place after the assassination.

The anti-government protesters blame Mubarak and his regime for many social and economic problems that Egypt has suffered during his three decades-long rule in Cairo.

With files from The Associated Press