World leaders reacted cautiously but with more than a little disappointment to Egyptian President Hosni Mubarak's announcement Thursday that he would not step down.

Mubarak went on nationwide television to say he would instead hand most of his powers to his vice-president, enraging protesters who warned the country could explode in violence.

"The Egyptian people have been told that there was a transition of authority, but it is not yet clear that this transition is immediate, meaningful or sufficient," Obama said. "The people of Egypt are calling for change, they've turned out in extraordinary numbers and all ages and all walks of life."

Obama warned that too many Egyptians are not convinced that the government is serious about making genuine change, especially young people "who've been at the forefront" of the demand for change.

"We want those young people, and we want all Egyptians to know, America will do all we can to support an orderly and genuine transition to democracy in Egypt," he told students at Northern Michigan University in Marquette, Michigan.

British Foreign Secretary William Hague told the BBC that his government will be watching Mubarak and his vice-president closely over the next few days.

"It is not immediately clear what powers are being handed over and what the full implications are," he said.

"We think the solution to this has to be owned by the Egyptian people themselves. All we want in the United Kingdom is for them to be able to settle their own differences in a peaceful and democratic way."

French President Nicolas Sarkozy expressed concerns that the protests which have put growing pressure on Mubarak do not result in an even more repressive regime taking power.

"I hope with all my heart for Egypt's nascent democracy that they take time to create the structures and principles that will help them find the path to democracy and not another form of dictatorship, religious dictatorship, like what happened in Iran."

Canadian Foreign Affairs Minister Lawrence Cannon issued a statement calling on all parties to show restraint.

"As we have said before, it is for the Egyptians themselves to decide who will govern them," Cannon said. "Again, Canada urges the government of Egypt to heed the voice of the Egyptian people and begin an orderly democratic transition to free and fair elections.

"While the need for democratic reforms is pressing, reform should not result in a vacuum that could result in extremism, violence or intolerance."

Israeli Defence Minister Ehud Barak, in New York for meetings with UN officials, would not respond to what is happening in Egypt, explaining that "it's up to the Egyptian people."

But he added that recent events in Egypt and elsewhere make a lot of Israelis "feel weak-kneed."

"Israel is strong, although we do have to follow things very carefully and make sure that Israel remains strong and to upgrade our security situation," he said. "That said, the reality will not change for the better if we will sink into inaction. We have to move forward all the time with the peace process. We have to diminish tensions."

He said the rest of the world should encourage change in Egypt but give the country enough time to prevent it from falling into the hands of "extremists."

"The role of the rest of the world is to tell (the Egyptians) honestly but behind closed doors and secure lines: 'We are ready to be there beside you if you move concretely and coherently toward change,"' Barak told ABC.