In his first appearance on television since a wave of protests engulfed his nation four days ago, Egypt's President Hosni Mubarak has called for the members of his cabinet to resign.
"I have asked the government to present its resignation today," Mubarak said, according to a translator.
While Mubarak said that he would appoint a new government on Saturday, he did not step down.
Mubarak defended his decision to call in the Egyptian military to quell the protests against his regime, though regretting that there were "innocent casualties and victims."
He also promised to initiate social, economic and political reforms, saying that he was on the side of the poor.
"[O]ur plans to combat unemployment and provide more educational services, healthcare and housing, will remain conditional on our efforts to maintain Egypt's security," he said.
Mubarak sent out the army and clamped a curfew on key cities on Friday as deaths in raging street protests demanding an end to his three-decade rule rose to at least 27.
Thirteen people died in clashes with police Friday in the canal city of Suez, at least five in Cairo and two more in Mansura, north of the capital with many fatalities caused by rubber-coated bullets, medics and witnesses said.
Seven people died on Wednesday and Thursday.
With the rising tide of anger exacting a heavy toll, key allies the United States, Britain and Germany expressed concern about the violence, with Britain noting that the protesters had "legitimate grievances."
There were also rumblings in Washington that massive US military and economic aid to Egypt, which has a 1979 peace treaty with Israel, might come under review in light of Cairo's suppression of the protests.
Thousands ignored a 6:00 pm (1600 GMT) to 7:00 am curfew in Cairo, Alexandria and Suez announced by state television, with many protesters calling on patrolling soldiers to join them.
"The army and the people, together!" protesters chanted in front of the Egyptian television building.
Soldiers made V-for-victory signs at passers-by near Cairo's opera house more than two hours after the curfew was to go into effect, with some civilians clambering onto their armoured vehicles.
"We don't want Mubarak any more, we don't want this government any more. But we love the army," said young Ehab Aley.
Protesters poured out of mosques after Friday prayers and run rampant through the streets, throwing stones and torching two police stations. Police chased them with batons, firing tear gas, water cannon and rubber bullets.
"Today is different: all Egyptians are together, the rich and the poor, to get Mubarak out," shouted one protester in downtown Cairo, his face covered with a scarf against the billowing tear gas.
Protesters set fire to the Cairo headquarters of Mubarak's ruling National Democratic Party, with television showing footage of the building which overlooks the Nile still ablaze six hours after it was engulfed in flames.
In Suez, protesters overran a police station, seized weapons and set fire to security force vehicles in fierce clashes.
The demonstrations, inspired by events in Tunisia, have swelled into the largest uprising in Egypt in the three decades of Mubarak's rule, sending shock waves across the region.
At least 27 people have now been killed, hundreds more injured and some 1,000 arrested across the country since the protests broke out on Tuesday.
Looting broke out in several parts of Cairo after nightfall, including at offices linked to the government in the upmarket Mohandeseen neighbourhood, with people taking office equipment without any police intervention.
Internet connections were cut across Egypt early on Friday, while mobile phone signals were patchy and text messages inoperative, affecting the ability of protesters to communicate with each other.
US Secretary of State Hillary Clinton urged Egypt to do "everything" to restrain its security forces and to embark on immediate reform, while German Chancellor Angela Merkel called on Mubarak to "allow peaceful protests."
US President Barack Obama, who had appealed to both sides on Thursday to avoid violence, held a 40-minute meeting on the situation with top members of his national security team, and ordered further briefings later in the day.
British Foreign Secretary William Hague said he was "very concerned about the pictures ... coming from Egypt."
He said it was "important to recognise that the people involved do have legitimate grievances."
Analysts say the United States was growing increasingly concerned that the refusal of Egypt to implement more political reforms could lead to further unrest and instability.
Egypt is one of the world's largest recipients of US aid, and receives $1.3 billion a year in military assistance alone.
But White House spokesman Robert Gibbs said: "We will be reviewing our assistance posture based on events that take place in the coming days."
Concerns were reflected in the financial world as well on Friday, with Fitch ratings agency saying it had revised its ratings outlook for Egypt to negative.
Continuing unrest would threaten economic and financial performance and would lead to a rating downgrade, it said.
The Cairo bourse was closed for the weekend, after having plunged 10 percent this week, but stocks on Wall Street fell sharply on the news.
Oil prices were higher partly because of the Egyptian unrest.
Oil jumped "on the back of concerns that increased unrest in Egypt and the rest of North Africa could impact the Suez Canal and the safe passage of oil and gas to and from Europe", CMC Markets analyst Michael Hewson said.
Mubarak, aged 82 and said to be in poor health, has not been seen publicly since the unrest erupted. However, the culture ministry has said he is to make an appearance on Saturday at the opening of the annual Cairo book fair.
Leading dissident Mohamed ElBaradei, who has said he would be prepared to lead a transitional authority if he were asked, was among a crowd of around 2,000 targeted by police and was forced to take refuge inside a Cairo mosque.
Some imams had encouraged worshippers to "go out and seek change," an AFP correspondent reported.
In London, British Airways said it was delaying its Friday evening flight to Cairo until Saturday morning to avoid landing during the curfew hours.
Updated from a prior version.