In an address to the country broadcast around the world, Mubarak said a new government would be put in place on Saturday.
In the address, Mubarak, who has been in power for three decades, said he is committed to economic and political reform and is determined to secure the stability of the country.
Mubarak said Egyptians should be aware of instability around the country and problems should not be dealt with by violence which breeds chaos.
Secretary of State Hillary Clinton says the U.S. is deeply concerned about crackdowns on protesters in Egypt.
In remarks at the State Department, Clinton also called on demonstrators to exercise restraint.
She said the U.S. supports universal rights of freedom of speech and peaceful assembly.
Clinton urged the Egyptian government to immediately entertain economic, political and social reforms.
Following protests that roared on Friday, reporters say a fire was set in a building on Saturday that houses several government offices in the square.
Just before Mubarak's speech that was broadcast worldwide, the army appeared to have taken control of the square where thousands of people had rioted on Friday.
Demonstrations in Egypt this week followed similar protests two weeks ago in Tunisia.
Those protests, like the demonstrations this week in Egypt, focused on poverty and political repression.
(Copyright 2011 by VERTEXNews/Newsroom Solutions)