Egypt's President Hosni Mubarak has tasked his his Vice President with opening 'immediate' dialogue with the opposition amid raging protests against the regime.

'President Hosni Mubarak has tasked me with opening immediate talks with the political forces to begin a dialogue around all the issues concerning constitutional and legislative reforms,' Mr Suleiman said on state television.

Mr Suleiman said steps were underway to implement decisions of the appeals court contesting results of autumn legislative elections in certain constituencies.

After a week of unprecedented rallies against the poverty, corruption and oppression under the 82-year-old military-backed leader, newly-appointed Suleiman appeared on state television to say Mubarak had asked him to begin dialogue with all political forces on constitutional and other reforms.

It seems unlikely Mubarak could preside for long within any new system that brought free elections to the most populous Arab state.

After the fall of Tunisia's veteran strongman two weeks ago, the shift will send a shockwave throughout the Middle East.

The Egyptian army has reportedly said it would not use force against anti-government protesters who have gathered in the capital, Cairo, for a seventh day.

Demonstrators have called for huge marches to take place tomorrow, if Mubarak refuses to stand down.

Police who abandoned their posts on Friday are back in some parts of Cairo.

The new Egyptian cabinet took office today, three days after the President dismissed the old government.

It is reported that at least 138 have been killed since the start of the protests. Cairo International Airport is reported to be packed with tourists trying to leave Egypt.

The European Union Foreign Affairs Chief, Catherine Ashton, said democratic reforms were needed in Egypt to create the conditions for free and fair elections.

The United States has said the crisis in Egypt should be settled by meaningful talks among a broad cross-section of the country.

White House Spokesman Robert Gibbs said the US was not taking sides between the government and the protesters, but that the grievances of the Egyptian people needed to be addressed.

The uprising has unnerved global markets. Share prices fell across Asia this morning with oil prices rising.

The mood between the troops and the protestors in the square remains generally relaxed, with people sharing food and standing by tanks daubed with anti-Mubarak graffiti.

The army appears to hold the key to Mr Mubarak's fate.

'The army has to choose between Egypt and Mubarak,' read one banner in Tahrir Square.

Deaths have occurred in clashes in the main cities of Cairo, Alexandria and Suez.

Mr Mubarak, a close US ally in the Middle East, responded by offering economic reform to address public anger at rising prices.

He also sacked his cabinet and appointed a vice president and new prime minister.

Both, however, were military men and the moves have done nothing to appease a protest movement who want him and his associates from the old guard to resign.

The US, which has given billions of dollars of aid to Egypt since Mr Mubarak came to power, has stopped short of saying openly that it wanted him out.

US President Barack Obama and Secretary of State Hillary Clinton have instead urged reform and spoke about 'an orderly transition'.

An Egyptian opposition coalition that includes the Muslim Brotherhood has turned to Mohamed ElBaradei, former head of the UN nuclear watchdog, to form a national unity government and make contact with the military.

The European Union has called for an orderly transition to a broad-based government, saying democratic reforms were needed to create the conditions for free and fair elections.

After talks in Brussels to discuss the crisis, EU foreign ministers called for ‘an orderly transition to a broad-based government, leading to a genuine process of essential democratic reforms’.

The statement added that the transition in the Arab world's most populous country should respect ‘the rule of law, human rights and fundamental freedoms, paving the way for free and fair elections’.