The White House is reportedly discussing a plan with Egyptian officials that would see Egyptian President Hosni Mubarak resign and immediately hand power to an interim government backed by the country's military.
The interim government would then work toward preparing the country for free and fair elections, to be held later this year.
As looting and arson tore through Cairo's streets amid the nation's worst civil strife in generations on Thursday, U.S. officials were mulling options aimed at restoring order in the country, which is a key U.S. ally in the region.
The New York Times first reported on the high-level discussions between top U.S. and Egyptian officials late Thursday.
Diplomatic talks continued late into the day as officials grappled with an escalation of violence that resulted in gangs of pro-Mubarak allies attacking anti-government demonstrators, foreigners and journalists for a second straight day Thursday.
Earlier Thursday, in an apparent reversal, Mubarak gave the first indication that he would be willing to step aside. However, the 82-year-old president tempered his statement by warning that chaos could result if he left his post after three decades of authoritarian rule.
"I am fed up. After 62 years in public service, I have had enough. I want to go," Mubarak said in an interview with ABC News.
Meanwhile, the Egyptian army took steps Thursday to halt the advance of pro-government rioters into a square in central Cairo where thousands of protesters have spent days holding demonstrations against the Mubarak regime.
At least eight people have been killed, and hundreds injured, in the violence.
The government increasingly blamed foreigners for fueling the demonstrations over the past 10 days.
"When there are demonstrations of this size, there will be foreigners who come and take advantage and they have an agenda to raise the energy of the protesters," Vice-president Omar Suleiman said on state television.
CTV's Lisa LaFlamme said the army was using tear gas and gunshots to try to disperse the groups of people fighting on the streets.
Earlier Thursday, the army placed soldiers directly in between the two groups, who have been in an unrelenting battle on the streets of Cairo for the past 24 hours.
Reporters have seen sticks, stones, petrol bombs, bottles and other projectiles thrown between the two groups, as the street clashes have raged on the edges of Tahrir Square -- the centre of the ongoing protests by thousands of Egyptians who want Mubarak to leave office immediately.
LaFlamme said at least 10,000 determined anti-government protesters remain inside Tahrir Square, as pro-Mubarak forces continue to try to push their way into the area.
The anti-government protesters blame Mubarak for many economic and social problems that have afflicted Egypt during his rule.
On Thursday, the recently appointed Suleiman said the president's son would not run to succeed his father in elections this fall. Mubarak has already said he will not run again.
The Mubarak regime also announced that it had frozen the assets of several former ministers, who are also under a travel ban.
A divided population
Janice Gross Stein, the director of the University of Toronto's Munk School of Global Affairs, said that despite the widespread protests, Mubarak still holds support with some Egyptians.
"There's a group in Cairo, a large group really who feel that there has to be a stable transition, they do not want him (Mubarak) forced out. He has considerable support in the rural areas," Stein told CTV's Canada AM during an interview in Toronto on Thursday.
"So there's a real division. There is a rural-urban division, there is an upper class-lower class division and you see all of that playing out in those clashes in the square."
Many anti-government protesters believe the Mubarak regime has paid supporters to enter Tahrir Square and cause havoc on the streets.
The Egyptian government appeared to acknowledge that the pro-Mubarak protesters had gone too far when Prime Minister Ahmed Shafiq went on television Thursday to apologize for the attacks on the anti-government protesters.
In remarks broadcast on Egyptian television, Shafiq said it was a "blatant mistake" to see Mubarak supporters attacking the anti-government protesters and he promised to investigate who was behind the provocations.
"I offer my apology for everything that happened yesterday because it's neither logical nor rational," Shafiq said. "What happened was wrong, a million per cent wrong, whether it was deliberate or not deliberate ... Everything that happened yesterday will be investigated so everyone knows who was behind it."
Prior to the apology issued by Shafiq, Egypt's Interior Ministry had publicly stated that its police were not involved in the clashes.
Canadian concerns
Canadians with friends and family in Egypt are anxiously watching the situation. Amr Mohamed had been in the country with his wife and two daughters during the winter holidays. He returned to Canada for work, while his family remained behind in Mansuriya, just northwest of Cairo, which has also seen protests and violence.
Now, he worries the situation is too chaotic for his wife and children to travel to Cairo so they can fly back to Canada, and he is contemplating flying to Egypt to be with them.
But while the chaos has kept him from his family, he is also gladdened by the protests against Mubarak.
"I have contradictory, mixed feelings," he told CTV.ca by phone. "I don't want more people to die. I want things to be as peaceful and calm as possible. But I also want this brutal regime out; I want Mubarak out."
The deteriorating conditions in Egypt have prompted Canada's Foreign Affairs department to leave the country immediately.
Cannon issued a statement early Thursday advising Canadians that Ottawa plans to continue evacuation efforts in Egypt today.
"All remaining Canadian citizens who wish to depart Egypt on a Canadian government chartered flight and who are able to do so should immediately proceed to the airport, Terminal 1, Departures area, as soon as possible on February 3," Cannon said in the statement.
"We strongly urge all Canadians to leave Egypt."
The House of Commons held an emergency debate in Ottawa on Wednesday night, so that parliamentarians could voice their concerns about what is happening in Egypt.
Liberal foreign affairs critic Bob Rae said that Canada was slow to respond to the events in Egypt, which he attributed to under-resourced consular offices.
"Canada consistently finds itself under-resourced without enough people on the ground and without a sufficiently determined response time from the government in Ottawa," Rae said.
The United Nations announced Thursday it was evacuating 350 staff and their families from Egypt, "due to the security situation."
UN spokesperson Rolando Gomez said some staff will remain in Egypt to carry out "essential functions."
With files from The Associated Press and The Canadian Press
