CAIRO: Egypt's embattled President Hosni Mubarak fired his Cabinet early Saturday and promised reforms in his first response to protesters who have mounted the biggest challenge ever to his 30-year rule.

But many protesters were outraged by Mubarak's nationally televised address, in which he also defended the crackdown by police on tens of thousands of demonstrators that drew harsh criticism from the Obama administration Friday, and even a threat to reduce a $1.5 billion program of foreign aid if Egypt escalated the use of force.

''We want more democracy, more efforts to combat unemployment and poverty and combat corruption,'' a somber-looking Mubarak said, calling the protests ''part of a bigger plot to shake the stability and destroy the legitimacy'' of the political system.

''I will not shy away from taking any decision that maintains the security of every Egyptian,'' he vowed.

President Barack Obama said he had spoken to Mubarak just after his address and he called on Egyptian authorities to refrain from using violence against peaceful protesters.

''This moment of volatility has to be turned into a moment of promise,'' Obama said. Many protesters instead were infuriated.

''We want Mubarak to go and instead he is digging in further,'' protester Kamal Mohammad said. ''He thinks it is calming down the situation but he is just angering people more.''

Mubarak's decision to dismiss Prime Minister Ahmed Nazif and the rest of the Cabinet would be interpreted as a serious attempt at bringing change under normal circumstances. But on a day when tens of thousands of people took to the streets to demand Mubarak's ouster, it fell far short of expectations.

As a result, options appeared to be dwindling for Mubarak, a 82-year-old former air force commander who until this week maintained what looked like rock-solid control of the most populous Arab nation and the cultural heart of the region.

He addressed the nation minutes after the end of a day of protesters running rampant on the streets of Cairo, battling police with stones and firebombs, burning down the ruling party headquarters, and defying a night curfew enforced by a military deployment.

The government's attempts to suppress demonstrations appeared to have eroded support from the U.S. _ suddenly forced to choose between its most important Arab ally and a democratic uprising demanding his ouster.

The protesters were clearly emboldened by their success in bringing tens of thousands to the streets in defiance of a ban, a large police force, countless canisters of tear gas, and even a nighttime curfew enforced by the first military deployment of the crisis.

Flames rose in cities across Egypt as police cars burned and protesters set the ruling party headquarters in Cairo ablaze. Hundreds of young men tore televisions, fans and stereo equipment from other buildings of the National Democratic Party neighboring the Egyptian Museum, home of King Tutankhamun's treasures and one of the country's most popular tourist attractions.

Young men could be seen forming a human barricade in front of the museum to protect it.Others around the city looted banks, smashed cars, tore down street signs and pelted armored riot police vehicles with paving stones torn from roadways.

''We are the ones who will bring change,'' said 21-year-old Ahmed Sharif. ''If we do nothing, things will get worse. Change must come!'' he screamed through a surgical mask he wore to ward off the tear gas.

Mubarak said the unrest was striking fear in the heart of the majority of Egyptians concerned about the future of their country. He defended a crackdown on protesters that included clouds of tear gas, beatings, rubber bullets and cuts to the Internet and cell phones.

He said he had given them instructions that the protesters be allowed to express their views. But, he said, acts of violence and vandalism left the security forces with no choice but to react to restore order.

''Violence will not solve the problems we face or realize the objectives we aspire to,'' he said.

Egypt's national airline halted flights for at least 12 hours and a Cairo Airport official said a number of international airlines had canceled flights to the capital, at least overnight. There were long lines at many supermarkets and employees limited bread sales to 10 rolls per person.

Once-unimaginable scenes of anarchy along the Nile played out on television and computer screens from Algiers to Riyadh, two weeks to the day after protesters in Tunisia drove out their autocratic president. Images of the protests in the smaller North African country emboldened Egyptians to launch four straight days of increasingly fearless demonstrations organized over mobile phone, Facebook and Twitter.

The government cut off the Internet and mobile-phone services in Cairo, called the army into the streets and imposed a nationwide night-time curfew. The extreme measures were ignored by tens of thousands of rich, poor and middle-class protesters.