Egypt's Hosni Mubarak is due to make an address on national television amid suggestions that he is preparing to step down.
A senior member of Egypt's governing party, Hossan Badrawi, has told the BBC he "hopes" Mr Mubarak will transfer power to Vice-President Omar Suleiman.
The US Central Intelligence Agency says there is a "strong likelihood" that Mr Mubarak will step down soon.
It comes on the 17th day of protests against his 30-year rule.
The Egyptian military has said it is ready to respond to the "legitimate demands of the people".
In a statement on Egyptian state TV, it said the safety and security of the people were paramount.
Earlier, Prime Minister Ahmed Shafiq told BBC Arabic that the scenario of President Mubarak stepping down was being discussed.
The BBC's Lyse Doucet, in Cairo, says the fact that President Mubarak's departure is even being talked about is a huge development.
Our correspondent, who spoke to Mr Badrawi by telephone, says the 25 January movement - the day when the protests began - will see this as a great victory.
State television has carried footage of a meeting of the Higher Military Council. State news agency Mena said the military council was in a state of continuous session "to protect the nation, its gains and the aspirations of the people".
Thursday's sudden developments came as thousands of Egyptians again took to the streets of Cairo and other Egyptian towns and cities, calling for President Mubarak to step down.
Doctors, bus drivers, lawyers and textile workers were on strike in Cairo on Thursday, with unions reporting walkouts and protests across the country.
The BBC's Jon Leyne, in Cairo's Tahrir (Liberation) Square, the focal point of the anti-Mubarak protests, reports that the protesters there are starting to celebrate after hearing news of Mr Mubarak's possible departure.
But Egyptian Information Minister Anas el-Fekky told Reuters news agency: "The president is still in power and he is not stepping down. The president is not stepping down and everything you heard in the media is a rumour."
Mr Mubarak had previously pledged to quit office after presidential elections due to be held in September.
Negotiations between the government and opposition groups have made little progress, with protesters disillusioned at plans for reform put forward by Mr Mubarak's government.
Egypt unrest: Higher Military Council statement
Egypt's Higher Military Council issued a televised address at 1530 GMT (1730 local time), saying it was in a state of continuous session to protect the nation and meet the aspirations of the people. The move comes after two weeks of mass demonstrations calling on President Hosni Mubarak to resign.
Footage aired on the state-run Nile News TV showed Defence Minister Field Marshal Hussein Tantawi chairing the meeting of two dozen army officers seated around a table. Here is the full text of the statement read out by a spokesman
Statement Number One, issued by the Higher Council of the Armed Forces,
Stemming from the armed forces' responsibility and committing to the protection of the people, safeguarding their interest and security, and keen on the safety of the homeland, the citizens and the achievements of the great Egyptian people, and asserting the legitimate rights of the people,
The Higher Council of the Armed Forces convened today, Thursday, 10 February 2011, to deliberate on the latest developments of the situation and decided to remain in continuous session to discuss what measures and arrangements could be taken to safeguard the homeland and its achievements, and the aspirations of the great Egyptian people.
Peace, mercy and the blessings of God.