Feb. 7 (Bloomberg) — Egyptian Vice President Omar Suleiman and some members of the opposition agreed on limited steps to resolve the crisis, even as the government stood firm against the demand from protesters that President Hosni Mubarak resign.

Suleiman met yesterday with the Wafd and Tagammu parties, the Muslim Brotherhood, which is banned from politics, and billionaire Naguib Sawiris. The negotiators agreed to set up a committee that will recommend by the first week of March constitutional changes needed for free and fair elections, Suleiman said in a statement.

The talks, along with diminished violence in Cairo’s Tahrir Square, a reopening of the nation’s banking system and resumption of work at the country’s courts, indicated a shift in the crisis that erupted last month. Egyptian credit-default swaps dropped Feb. 4 as the U.S.-backed discussions began.

“This is the beginning and early stages of a very protracted negotiation about power and how to share it,” said Brian Katulis, a senior fellow at the Center for American Progress in Washington and one of several outside analysts who have consulted with the White House’s National Security Council in the last week.

Easing Emergency Law

  The government committed yesterday to easing the nation’s emergency law, in place since President Anwar Sadat was assassinated in 1981, if the domestic situation permits. It also pledged to release prisoners of conscience and defend freedom of the press, after journalists were attacked and harassed at the protests in Cairo.

The agreement omitted any plan for an early departure by Mubarak. Prime Minister Ahmed Shafiq, interviewed on CNN, said Mubarak won’t leave office before September, when presidential elections may be held.

A key question is whether the younger generation of protesters feel they were represented in the meetings as fully as they had hoped, Katulis of the Center for American Progress said.

“The Obama administration should be careful to avoid anything that has a ’made in America’ stamp on it” and should “wait to see what the reaction is among Egyptian people” before responding to yesterday’s agreement, Katulis said in a telephone interview from Israel, where he is attending a security conference.

Obama Remarks

President Barack Obama declined to discuss Mubarak’s intentions. “Only he knows what he’s going to do,” Obama said, speaking on Fox News before the Super Bowl football broadcast.

Both the Muslim Brotherhood, the largest opposition faction, and protest figure Mohamed ElBaradei, said they still want Mubarak to resign immediately and supported continued protests in Tahrir Square until that happens.

Egyptians stood in long lines yesterday as banks opened for the first time in more than a week amid receding violence. As many as 300 people have died since clashes started Jan. 25, according to the United Nations. Egypt’s courts also resumed hearings, state television said.

The Egyptian pound weakened yesterday to the lowest level since January 2005. The pound dropped 1.3 percent to 5.933 to the U.S. dollar from 5.857, according to data compiled by Bloomberg.

Oil Prices

Oil traded near the lowest in a week as the protests showed signs of easing. The March contract was at $89.13 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 11:17 a.m. Singapore time. It declined $1.51 to settle at $89.03 on Feb. 4, the lowest since Jan. 27, two days after the uprising started.

The prospect of a disruption to shipments through the Suez Canal last week sent North Sea Brent crude above $100 a barrel for the first time since October 2008.

Opposition groups, including the socialist Tagammu party, the largest opposition group in parliament, and the Wafd party, want the government to ease constitutional curbs that make it difficult for independents to run for president.

Suleiman, 74, said in an interview with ABC News that he is an “old man” and won’t be a candidate for president when elections are held.

“The events in Egypt seem to be subsiding a bit,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. At the same time, “protests could come back to the same height if the demands aren’t met in a timely manner.”

Seeking Orderly Transition

Secretary of State Hillary Clinton, citing the constraints of the Egyptian constitution and the need to ensure that upcoming elections are credible, suggested an orderly political transition in Egypt might be harder to bring about if Mubarak resigns.

A successful election will require dialogue, constitutional changes and the creation of political parties able to contest the vote, all of which will take time, the top U.S. diplomat told reporters on her plane as she returned from Germany. “If the president were to resign,” Clinton said, based on her understanding of Egypt’s constitution, “presidential elections would have to be held in 60 days.”

Protesters gathered for a 13th day yesterday in Tahrir Square, the focal point of demonstrations. The army has cordoned off the historic site with barbed wire and limited confrontations with pro-Mubarak rallies.

Christian Solidarity

  About a thousand Christian worshipers prayed in the square, as several thousand more gathered around them. As prayers concluded the protesters chanted “Muslim, Copt, one hand.” Earlier, some protesters held signs with the Muslim crescent and the cross, echoing solidarity movements last month following a bombing of a Coptic Christian church in Alexandria.

Orderly demonstrations in the past three days contrasted with rallies Feb. 2 and Feb. 3 when Mubarak supporters clashed violently with protesters, resulting in 11 deaths, according to official Egyptian figures. The people in Tahrir Square largely ignored the urging of Army officials for them to go home, sticking to demands for Mubarak to quit.

Mubarak “doesn’t have to leave Egypt at all,” opposition leader ElBaradei said on NBC’s “Meet the Press” program yesterday. “But he has to cede power.”

The president’s son, Gamal Mubarak, resigned as head of the ruling National Democratic Party’s policy committee Feb. 4. He was replaced by Hossam Badrawi, who also replaced Safwat el- Sherif as secretary-general, the state-run Middle East News Agency reported.

Google Executive’s Whereabouts

  Google Inc. marketing executive Wael Ghonim will be released today by the authorities, Egyptian state television reported. Ghonim, a spokesman for the opposition, has been reported missing Jan. 27.

Egypt tightened security along the Suez Canal, based on information that members of Hamas and Hezbollah infiltrated the country, the state-run Al Ahram newspaper reported, citing an unnamed security official. The Islamic militant groups Hamas and Hezbollah are classified as terrorist organizations by the U.S.

Concern that turmoil in Egypt would spread sent the Dubai Financial Market General Index down 4.3 percent on Jan. 30. Since then, the index has recovered and rose 1.6 percent Feb. 4 to 1605.89.

Stock Market Closed

  While banks are open, Egypt’s stock market remains closed, Hisham Turk, communications manager at the exchange, said by telephone in Cairo. It may open during the week, he said. Railways are now working normally after being halted due to the demonstrations, Egyptian state television reported.

Commercial International Bank Egypt SAE, the North African nation’s biggest publicly traded lender, said there were no panic transfers abroad on the first day banks opened following unrest that started Jan. 25.

Chairman Hisham Ezz al-Arab, speaking to Al Arabiya television, said there were no restrictions on transfers and that the biggest challenge was transporting cash.

Egypt will try to raise as much as 15 billion Egyptian pounds ($2.6 billion) in a record sale of Treasury bills with bankers predicting yields will rise as foreign investors avoid the auction. Ahmad Alanani, director of Middle East fixed-income sales at Dubai-based Exotix Ltd., said yields may climb as much as 350 basis points, or 3.5 percentage points, on all maturities and that local banks have enough funds to buy the bills.

The government is considering a law to provide unemployment insurance for all unemployed Egyptians, Finance Minister Samir Radwan said on state television. The law would be effective in 2012, he said.

Other Arab countries have been gripped by spreading instability in the Middle East. In Yemen, police used tear gas against anti-government protests Feb. 3, and Jordan’s King Abdullah dismissed his government last week. Algeria’s President Abdelaziz Bouteflika said Feb. 3 that a 19-year-old state of emergency will be lifted “in the very near future.” The protests began in Tunisia, where President Zine El Abidine Ben Ali was forced from office last month after two decades in power.

–With assistance from Nayla Razzouk in Amman, Mahmoud Kassem, Ahmed Namatalla, Abdel Latif Wahba and Maram Mazen in Cairo, Glen Carey, Alaa Shahine, and Dana El Baltaji in Dubai, Jones Hayden and Gregory Viscusi in Brussels, Naomi Kresge in Berlin, Indira Lakshmanan in Washington and Nicole Gaouette in Washington. Editors: Terry Atlas, Chris Anstey

To contact the reporters on this story: Mariam Fam in Cairo at mfam1bloomberg.net; Vivian Salama in Abu Dhabi at vsalamabloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at bardenbloomberg.net.