Leading article: The future of the Middle East is being decided in Cairo

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Malign confusion reigned in the Egyptian capital last night as power ebbed from the regime of Hosni Mubarak to the streets but could find nowhere of legitimacy or permanency to settle.

The personnel changes announced by a desperate President on Saturday – the head of intelligence to become Vice-President and the former head of the Air Force to become Prime Minister – paved the way, along with the existing state of emergency, for the imposition of martial law. Mr Mubarak's televised meeting yesterday with the generals sent the same message. If the army and the President were united, however, they were united in impotence.

With the people in control of Cairo's Tahrir Square, some suburbs and parts of other cities reportedly under vigilante rule, and supplies of basic food and fuel threatening to run short, the stand-off of the past week had to be coming, in some way, to a head. Low-flying military aircraft, clearly calculated to intimidate, suggested that the relative bonhomie between military and civilians might be coming to an end. New columns of tanks said the same. But any aggressive use of force threatened to complicate the most obviously benign resolution. Egypt, and the region as a whole, were precariously poised last night between a tentatively positive denouement and chaos.

As in Tunisia, one hallmark of the protests has been the absence of any leader; the focus is hostility to Mr Mubarak's continued rule. Yesterday, there was a sense that "cometh the hour, cometh the man", as Mohammad ElBaradei, Nobel prize-winner and former head of the International Atomic Energy Agency, moved to step into the breach, addressing crowds in Tahrir Square. For much of the outside world, Mr ElBaradei looks very like an ideal one-man interim solution; the more pertinent, and harder, question is whether he can wield anything like the authority among his compatriots that he does abroad.

At best, Mr Mubarak's designation of a Vice-President and his public show of solidarity with the military were designed not to preserve his 30-year rule, but to ensure an orderly transition – or a transition as orderly as it can be at this late stage. If the President cedes power and the military can retain popular trust, there is the outline of at least a temporary solution. An interim administration with the prominent involvement of the armed forces would be hard for Egypt's Western allies to stomach, but – with a short, fixed term, a promise of rapid reforms and an early date for free elections – it could be the least bad of many scenarios. Mr ElBaradei's imprimatur, or direct involvement, could make the difference.

The immediate test for any interim regime would be whether it could win the confidence of the protesters thronging the streets and those people sheltering in their homes too frightened to go out. For Egypt's friends in the world, the test would be whether they would be able to hold any new regime to its undertakings.

So far, the US, the EU, the UN Secretary General and Israel have all responded in a measured way to the developments in Cairo – as well they might, given their culpability in not urging change before. Whatever the policy mistakes of the past, however, everyone's interests at this crucial juncture lie in facilitating a peaceful transition.

The alternatives are dire. If Mr Mubarak's moves in recent days are designed not to ease a transition, but to reinforce his hold on power, it is hard to see how popular anger can be held back. A military crackdown would then be one possibility; widespread disorder – and a conflagration that could set the whole region on fire – another. There was still time, last night, for anarchy to be averted. But it was time that was rapidly running out.

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