"Egyptian President Hosni Mubarak is due to appoint a new government after firing his previous administration amid a wave of protests against his rule.
Friday saw tens of thousands on the streets of Cairo, Suez, Alexandria and other cities in protests that continued into the night, defying a curfew.
At least 18 people are reported to have been killed during the day in clashes with security forces.
Protests are continuing in central Cairo, and shots have been heard.
Mobile phone services have been restored in the capital, but the internet remains down.
The BBC's Rupert Wingfield-Hayes, in Suez, says the streets of the eastern port city were left to the protesters overnight but the army has now arrived there.
Mr Mubarak's televised address on Friday evening - his first statement since the protests began - followed a day of violence and anarchy.
In Cairo, troops in armoured vehicles were deployed in support of riot police as protesters set fire to the headquarters of the governing NDP party and surrounded state TV and the foreign ministry. The army secured the Egyptian Museum, home to such treasures as the gold mask of King Tutankhamen, to protect it from looters.
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Analysis
Magdi Abdelhadi BBC Middle East analyst
Hosni Mubarak looked composed and determined to survive his worst crisis since coming to power 30 years ago.
There was both a carrot and a stick - he acknowledged that the demands of the protesters were legitimate, but accused them of resorting to violence to destabilise Egypt.
Such an accusation is likely to infuriate them, and possibly increase their determination to challenge him even more.
Mr Mubarak defended his record in government, the very thing that is in doubt in the eyes of the hundreds of thousands who have taken to the streets in the past four days.
He promised to continue with democratic reforms, but as far as the opposition is concerned, they have heard it all before. He did make however one big concession: he sacked his entire cabinet.
Medical sources said at least five people were killed in Cairo on Friday, with a further 13 losing their lives in Suez. If confirmed, that would bring the death toll to at least 26 since the protests began on Tuesday. Hundreds have been injured.
The BBC protested to the Egyptian authorities after a reporter for BBC Arabic, Assad Sawyer, was arrested and beaten by plain-clothes policemen in Cairo.
In his address, Mr Mubarak announced the sacking of his government and said he would give the new cabinet clear instructions to deal with "the priorities of the current phase". Mr Mubarak blamed the protesters for abusing the freedoms he said he had given them, and accused them of destabilising the country.
The BBC's Jon Leyne in Cairo says there had clearly been a lot of discussion behind the scenes before Mr Mubarak spoke to the country, but his comments will probably just provoke further unrest.
'Moment of promise'
US President Barack Obama said he had telephoned President Mubarak and told him he must give meaning to his pledges of greater democratic and economic freedom.
Mr Obama said a violent response by Egyptian authorities would not address the grievances of the people, and he also asked protesters to desist from violence. He also called on the Egyptian government to stop interfering with the internet, social networking sites, and mobile phone services.
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Barack Obama: "What's needed right now are concrete steps that advance the rights of the Egyptian people"
The BBC's Paul Adams in Washington said there is no immediate suggestion that the White House is cutting its ties with Mr Mubarak, its long-time ally but it is clearly giving him the chance to turn the unrest into what Mr Obama described as "a moment of promise".
Earlier, White House spokesman Robert Gibbs said Washington would review its aid to Egypt based on events in the coming days. Egypt is the fourth largest recipient of American aid, after Afghanistan, Pakistan and Israel.
Britain, the US and France are all advising against non-essential travel to Egypt.
The unrest in Egypt follows an uprising in Tunisia two weeks ago, in which President Zine al-Abidine Ben Ali was toppled after 23 years in power.
The Tunisian upheaval began with anger over rising food prices, high unemployment and anger at official corruption - problems which have also left many people Egypt feeling frustrated and resentful of their leadership."
http://www.bbc.co.uk/news/world-middle-east-12314799
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