Political Headlines - Part 1

BRET BAIER, FOX ANCHOR: Good evening. I'm Bret Baier, and this is a Fox News alert. The fourth day of anti-government demonstrations there has been the most intense, so far. And the U.S. is now trying to balance its promotion of Democracy and its relationship with America's closest Arab ally.Just moments ago, Egyptian president, Hosni Mubarak, spoke to his nation, saying according to translation, quote, There's a fine line between freedom and chaos. But then, the 29-year president of Egypt demanded that his cabinet resign, promise social, economic and political reform, and said a new government would be appointed Saturday.

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HOSNI MUBARAK, EGYPTIAM PRESIDENT: I will not allow fear to take over the citizens. Entrust the new government starting today. To work and deal with the priorities of the Egyptian people. greg palkot

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BAIER: We have Fox team coverage tonight. White House correspondent, Mike Emanuel, tells us what the Obama administration is doing and saying, but we begin with correspondent, Greg Palkot in Cairo.

UNIDENTIFIED MALE: The Egyptian people will be the ones who will make the change.

The outlawed Islamist political and social movement in Muslim brotherhood was involved. Also involve tonight, Egyptian military. BAIER: We lost the connection there to Greg Palkot in Cairo. White House correspondent, Mike Emanuel, is monitoring that. MIKE EMANUEL, FOX NEWS WHITE HOUSE CORRESPONDENT: Bret, good evening. White House officials are describing it as a very fluid situation and say they are deeply concerned about the situation in Egypt. President Obama has not spoken within Egyptian president, Hosni Mubarak, but officials here have made it clear. Mr. Obama is spending considerable time on Egypt.

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EMMANUEL (voice-over): Instead of the standard president's daily brief, aides say Mr. Obama spent 40 minutes meeting with key members of his national security team on Egypt. A short time later, Secretary of State Clinton spoke about the unfolding situation involving a key Arab ally.

HILLARY CLINTON SECRETARY OF STATE: We are deeply concerned about the use of violence by Egyptian police and security forces against protesters. And we call on the Egyptian government to do everything in its power to restrain the security forces.

EMMANUEL: In an interview yesterday, Vice President Biden was careful in his description of Egyptian president, Hosni Mubarak.

EMMANUEL: Officials say the U.S. will review its $1.5 billion in annual aid to Egypt based on events. And today, the administration offered some helpful hints to Mubarak's governments.

CLINTON: There are deep grievances within Egyptian society. And the Egyptian government needs to understand that violence will not make these grievances go away.

EMMANUEL: But as protests developed in the U.S. and the number of those killed and injured in Egypt kept growing, pressure built on the Obama administration to take a more forceful stand against the violence. White House Spokesman Robert Gibbs condemned the violence on both sides and called on the Egyptian government to address the concerns of its people and return freedoms including use of the internet and social networking websites.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We've reached a point where the grievances of those have to be addressed in concrete reforms. (END VIDEOTAPE)

BAIER: Mike, thank you. We re-established that connection with Greg Palkot live in Cairo and Greg joins us. PALKOT: Hey, Bret. The statement coming well after midnight Cairo time on state television from Egyptian president, Hosni Mubarak, sending out a word to the Egyptian people to remain calm. He offered that pledge of reform. Bret, I talk to people shortly after that speech by those comments coming from President Mubarak. It's not enough, Bret.

BAIER: Yes. I know it's a big, big effort that's out there on the streets, but we're getting reports that the Muslim brotherhood, the radical Islamist party in Egypt made calls to get out on the streets. I must add, though, we saw other people on the streets today as well. BAIER: OK, Greg. Live from Cairo. We will look at today's latest fight over healthcare reform as well in a bit.

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More unrest in Egypt, the fourth day of anti-government protests across that country turned out to be the most intense. And battle president, Hosni Mubarak, says he has asked his cabinet to resign. National Security correspondent, Jennifer Griffin, is at the Pentagon. Good evening, Jennifer. JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT: Well, I think it's a good question, Bret. There's been this talk about the Muslim brotherhood, but they've been remarkably restrained. There are 625 U.S. military service members inside Egypt, but they were there before these riots began. GRIFFIN: Well, I think what was notable in President Mubarak's speech was just how in control he appeared. There was talking about how the Mubarak regime had reviled what they call the name and shame approach of the Bush administration. greg palkot

BAIER: OK. Jennifer Griffin, live at the Pentagon. Jennifer, thank you. CATHERINE HERRIDGE, FOX NEWS NATIONAL CORRESPONDENT: Well, thank you, Bret. Also, Mohamed ElBaradei who is now under house arrest there and the Egyptian military, especially, whether Mubarak will continue to have their support.

BAIER: Interesting. Thank you, Catherine. Just now, a Fox News alert. We will get a live statement from President Obama about the situation in Egypt. You'll see that live here on Fox News Channel. As we said, President Mubarak in power for almost 30 years. We will hear from President Obama in just a few minutes. Continuing coverage on Fox News Channel.

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BAIER: This is a Fox News alert. You're looking live at the White House. We're awaiting a live state from President Obama on the turmoil in Egypt. Of course, we've been talking about the anti-government demonstrations there. Growing more violent. President Hosni Mubarak ordering the military into the streets. Chief Washington correspondent, Jim Angle, reports on the arguments.

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JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT (voice-over): The Obama administration claimed today its healthcare law will bring down cause for everyone once it takes full effect in 2014 as the president made fun of the critics.

The facts remain clear, the Democrats healthcare law increases healthcare costs. ANGLE: The law now forces all plans to offer $750,000 in annual benefit. It's already granted waiver to McDonald's and other low-wage firms. Some fear employers will just drop insurance altogether or hire fewer people.

ANGLE (on-camera): The administration promises we can have better healthcare at lower prices. BAIER: Jim, thank you. Again, everyone, we're waiting for President Obama's statement on Egypt in just a few minutes.

Correspondent Steve Harrigan reports on today's memorial service at Florida's Kennedy Space Center.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: The crew of the space shuttle Challenger honored us for the manner in which they live their lives. In Miami, Steve Harrigan, Fox News.

Keep it here on Fox News Channel.

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BAIER: Welcome back to Special Report. You're looking live at the White House and the state dining room. We are awaiting a statement from President Obama on the massive unrest in Egypt. As we've told you throughout the day, violence has escalated there, the fourth day of anti- government demonstrations. Today saw protesters clashing with police and military personnel ordered in the street.

Egyptian President Hosni Mubarak has demanded his cabinet resign and promised the appointment of a new government Saturday. Let's quickly, and we're under two minutes to the president, get an update from correspondent Greg Palkot live in Cairo. Greg?

GRET PALKOT, FOX NEWS CORRESPONDENT: Bret, yes, President Hosni Mubarak coming on state television late tonight, giving those offers of reform, of aid, and calling for calm. We watched out in the street while protesters clash with riot police. When night fell, there was a military curfew. Riot police pulled back, but the protest didn't. Government buildings here like the headquarters of Hosni Mubarak's political party was hit as well as the radio and TV center.

What is the reaction to the Mubarak comment? We heard from people in the street that verdict, the instant analysis from the people. The protesters here in about 1:00 in the morning Cairo time. BAIER: Greg Palkot life in Cairo. Let's go quickly before the president arrives to Mike Emanuel on the north lawn of the White House. Mike?

MIKE EMANUEL, FOX NEWS CORRESPONDENT: Bret, a senior administration official says President Obama spoke for about 30 minutes with Egyptian president Hosni Mubarak and the purpose of the statement is for him to be able to lay out in public the remarks.

BAIER: Mike, thank you. The president of the United States.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: My administration has been closely monitoring the situation in Egypt, and I know that we will be learning more tomorrow when day breaks.

The people of Egypt have rights that are universal. I also call upon the Egypt government to reverse the action they have taken to interfere with access to the internet. In the absence of these reforms, grievances have built up over time.

When President Mubarak addressed the Egyptian people tonight, he pledged a better democracy and greater economic opportunity. What's needed right now are concrete steps that advance the rights of the Egyptian people, a meaningful dialogue between the government and citizens, and a path of political change that leads to future of greater freedom and greater opportunity and justice for the Egyptian people. Now, ultimately, the future of Egypt will be determined by the Egyptian people. greg palkot