As the smoke clears from Egypt's most violent political protests in more than 30 years, President Hosni Mubarak still retains power.
But veteran Egypt watchers say his fierce repression of the unrest will severely complicate America's relations with his government and all but cripple his desire to have his son, Gamal, succeed him.
In Egypt Mubarak announced he would dissolve his government in his first appearance on television since protests erupted.
"He's going to try to tough it out," said Scott Carpenter, a former Bush administration official now at the Washington Institute for Near East Policy.
But by firing his cabinet and replacing ministers who were committed to liberalizing and privatizing Egypt's economy, the president maybe sacrificing the country's economic growth, in an effort to achieve favor of short term political stability, Carpenter added. "It's not clear he will be able to pull this off."
Protesters and civil rights activists reacted with disbelief and disappointment to president Mubarak's determination to stay on Egypt's ruler.
Basem Fathy, a human rights activist who works for the Egyptian Democratic Academy, a group that advocates greater human rights and political liberalization, said that President Mubarak's decision was shocking and unacceptable. "People should not have shed blood for nothing," he said.
He said that the dissolution of the government would not satisfy Egyptians and that protests would continue. "That Cabinet was a group of Muppets. They were nothing. " He blamed the Obama Administration for not insisting that Mubarak leave power.
"Now we have two enemies, President Mubarak and President Obama" said Fathy, who said he saw people killed and wounded on Friday during the protests.
The Obama Administration has struggled to support the tens of thousands of protesters who are demanding legitimate elections, greater political freedom and an end to the ruling government's corruption and repression, but not undermine the stability of the pro-American government that is a linchpin of American policy in the Middle East.
It is a difficult balance to strike, administration officials said Friday.
For most of his almost 30-year rule, President Mubarak, an ailing 82-year-old former military officer, has been supportive of Washington's efforts to broker an Arab-Israeli peace deal, counter-terrorism initiatives, and its efforts to roll back Iran's nuclear weapons program and contain its regional ambitions.
Egypt was the first Arab state to make peace with Israel and has been a staunch American ally in the region ever since Mubarak's predecessor, Anwar Sadat, broke with the former Soviet Union. But finding a balance between supporting the democratic aspirations of the Egyptian people and not undermining an increasingly repressive, but staunchly pro-American ally in Cairo has become more challenging.
Steven A. Cook, a scholar at the Council on Foreign Relations who returned Thursday night from leading a study group to Egypt, said it was not yet clear whether Mubarak would survive the challenge.
"The protests may be leaderless, but they are truly organic. They enjoy massive support," said Cook in an interview.
Even if Mubarak survived this greatest challenge to his 30-year-rule, Cook added, it would be far harder for President Obama to openly support Egypt, which received roughly $1.5 billion a year in military aid and $250 million in economic assistance last year.
"From now on," he said, "this will have to be an even tougher regime, one in which security and military concerns totally dominate," Cook said.
One administration official, who spoke on condition of anonymity since he was not authorized to speak publicly about this sensitive foreign policy conundrum, confirmed that supporting a government which had "killed, gassed, jailed, tortured and generally abused its opponents" would be a much harder political call.
On Friday afternoon, White House officials were debating whether to cut American assistance to Egypt or what other steps they could take to signal America's disapproval of the Egyptian government's crackdown, without not undermining or destabilizing the regime. President Obama was said to be receiving briefings throughout the day about the political earthquake that was rocking the country, indeed the region.
White House press secretary Robert Gibbs said President Obama had not spoken with the Egyptian president since the crisis began. One senior Egyptian official said President Mubarak's senior aides were furious over what the administration considered balanced criticism.
Although Vice President Joe Biden said in an interview on PBS Thursday night that Egypt was an American ally and that he did not consider President Mubarak a "dictator," Egyptian officials have told visitors they feel that Washington's comments have undermined Egyptian stability.
"We feel betrayed," the official said.
Carpenter said Mubarak's "radio silence" of nearly four days spoke volumes about the severity of the crisis.
The fact he had not spoken to the Egyptian people throughout the strife-ridden week raised questions about the Egyptian regime's strategy and staying power.
Perhaps Mubarak felt hemmed in and did not know what to say, Carpenter said, or that if he made concessions on reform that protesters have been demanding, he would appear weak.
"Or perhaps he did not want to be compared to Ben Ali," Carpenter added, referring to the fact that the Tunisian president addressed his public and promised reforms hours before he fled the country.
Other analysts agree Egypt's demonstrations are likely to make it virtually impossible for Gamal Mubarak, the president's 47-year-old son, to succeed his father as president. "Gamal is over," said Fouad Ajami, a scholar at Johns Hopkins University.
While President Mubarak's son has a base in the National Democratic Party, the ruling party, he has not enjoyed strong support from the security establishment at the core of Egypt's government.
Gamal Mubarak's whereabouts are uncertain. Reports in the Egyptian and foreign press have placed him in London, but others have said he is still in Egypt.
The current protests are the most serious disturbances in Egypt since Mubarak came to power in the wake of Anwar Sadat's assassination in 1981 by Muslim extremists. In January, 1977, Egyptians across the country staged two days of violent food riots over the rising price of bread; in 1986, Central Security Forces, (CSF) the 300,000-man force that is charged with maintaining order, mutinied and staged protests for four days.
The fate of the current regime depends largely on the extent to which the security forces and the 350,000- man military continue to define their power and privileges as synonymous with the perpetuation of Mubarak's rule.
"The performance of these forces is key to the outcome of this crisis," argued Jeffrey White, a former Defense Intelligence Agency official and now an analyst at the Washington Institute for Near East Policy.
In Tunisia, for instance, former president Ben Ali had little choice but to flee the country after the army chief reportedly told him that his forces would not fire on protesters.
Egyptian police, Central Security Forces and the army were all deployed on Friday in efforts to contain the protests in defiance of a government curfew.
The White House spokesman Gibbs called upon the Mubarak government to view the protests as an "opportunity" to enact reforms and to be "responsive" to the protesters' demands for greater democracy and political space. He asked the government to open up Internet and cell phone networks that have been shut down, and expressed "deep concern" about the reported arrest of Mohamed El Baradei, the former head of the International Atomic Energy Agency who returned to Egypt earlier this week.
"The grievances of those must be addressed in concrete reform," Gibbs said.
The largest organized opposition group to the Mubarak regime, however, is not the secular opposition, but the Muslim Brotherhood, which has been hostile to Egypt's peace with Israel, many other American policies in the region and seeks a greater degree of Islamic religious law for Egyptians.
In an article in Friday's Financial Times, American Middle East expert Anthony Cordesman called the Brotherhood "the strongest political alternative" to the Mubarak regime.
But he warned that even the Brotherhood was "weak," more "ideological than practical," and might not be able to meet the expectations of the protesters.
Islamic banners of earlier protests in Egypt were not in evidence this week. Rather, Steven Cook said, Egyptians in the streets were calling for jobs, greater democracy, and respect for human and civil rights. The April 6th movement, a secular opposition group, released a list of demands this week, none of which referred to religious themes.
The group instead called for increases in the country's minimum wage, the lifting of the emergency law that gives the government unrivaled powers and has been in effect since the Sadat assassination. The group also called for a restaging of last fall's parliamentary elections, in which almost all of the opposing parties of Egypt were denied seats in elections widely condemned as fraudulent.
The irony of the current protests is in Egypt, as in Tunisia, demonstrators have turned out by the thousands despite the government's rather impressive record of growth and economic development.
The Egyptian economy has been growing at rates of roughly 6 and 7 percent a year in the past decade, though the vast majority of Egypt's 83 million people still earn under $4 a day and the gap between rich and poor is growing.
While protesters remained in the streets on Friday night, members of Mubarak's inner circle were vowing to stay in power. Omar Suleiman, the head of Egyptian intelligence and widely touted as a possible successor to Hosni Mubarak, told a group of western visitors earlier this week the government had a strategy for containing the protests, that Mubarak was not weak, and that he would not be forced from power. Egypt, he said, would not go the way of Tunisia.