Despite rumors that Egyptian President Hosni Mubarak intended to step down (a rumor endorsed by the Director of Central Intelligence) he stated adamantly in his speech this evening that he intended to stay in power. Judging by the live feed from Al Jazeera, the crowd in Tahrir Square in Cairo was absolutely outraged--having assumed that Mubarak was leaving.
Josh Rogin has a good piece on the internal rifts between the White House and the State Department on how to handle the matter, but this puts the administration in an even more difficult position than they were before. The calls for the U.S. to forcefully demand Mubarak step down are going to grow louder--but the outcome in Egypt isn't really within U.S. power to dictate. There's also the fact that Mubarak was practically begging for that kind of outside condemnation from the U.S.--in his speech he declared that “We will not accept or listen to any foreign interventions or dictations.” He's desperate for an outside enemy he can use to rally popular support or justify a crackdown. It's possible he's actually just baiting the protesters into doing something that will give him the pretext to react harshly.
There's a really fine line the administration has to tread here. What they do next should be in the interest of making sure Mubarak steps down. But it's not clear that what everyone will want them to do--publicly and forcefully demand he step down--will actually help that happen.