Egyptian President Hosni Mubarak has announced a new cabinet amid pressure from protesters, who have gathered in Cairo again in their tens of thousands.
Interior Minister Habib al-Adly, widely despised by protesters, and the finance minister have been replaced.
However, correspondents say it is likely demonstrators will only settle for Mr Mubarak's removal from office.
The army has vowed it will not use force against the protesters, who have called a massive march on Tuesday.
The army said in a statement carried on Egyptian media: "To the great people of Egypt, your armed forces, acknowledging the legitimate rights of the people... have not and will not use force against the Egyptian people."
The BBC's Jon Leyne in Cairo says this is a devastating blow to Mr Mubarak because to regain control of the streets he would need the use, or at least the threat of the use, of the army.
Mr Mubarak, who has been in power for 30 years, has ordered new Prime Minister Ahmed Shafiq to push through democratic reforms and create new jobs.
But there are few major changes in the new cabinet line-up, with Foreign Minister Ahmed Aboul Gheit and Defence Minister Gen Mohamed Hussein Tantawi - who also becomes deputy PM - both keeping their posts.
Mr Adly has been replaced by Mahmud Wagdi, an army general, while Samir Mohammad Radwan replaces Youssef Boutros-Ghali as finance minister. Mr Radwan said he had a "national mission at a very critical time".
The line-up confirms a purging of those behind Egypt's economic liberalisation and growth over the past few years, analysts say, and a move towards a more military cabinet.
A number of businessmen holding economic posts have been removed. Some Egyptians have resented the influence of the tycoons.
Concerns are growing about the economy after a week of protests.
Moody's Investor Services has downgraded Egypt's bond rating and changed its outlook from stable to negative, following a similar move by Fitch Ratings last week. Both cited the political crisis.
World oil prices on Monday topped $100 a barrel amid fears of the ongoing unrest.
Few of the 50,000 protesters in Tahrir Square in the centre of Cairo appeared appeased by the cabinet changes.
"We will stay until the coward leaves," the crowd chanted.
One protester, Rifat Ressat, told Agence France-Presse news agency: "We want a complete change of government, with a civilian authority."
But he did welcome the replacement of Mr Adly, who he said was "responsible for all the violence".
Another demonstrator told the BBC: "This is not a new government. This is the same regime - this is the same bluff. [President Mubarak] has been bluffing us for 30 years."
The BBC's Jim Muir in Cairo says the military, who cordoned off Tahrir Square with tanks, were relaxed and were letting people come and go.
There were no riot police, and our correspondent says the government is being quite clever in keeping the unpopular police force out of contact with the protesters.
Shortly after the curfew started again at 1500 local time (1300 GMT), the BBC's Lyse Doucet in Cairo said: "There is a steady stream of people going to Tahrir Square, even families with children. Others are streaming out, saying they were on the early shift."
Leaflets were being distributed to the crowds calling on the army to take the people's side and resist orders to move against them.
Some police are back in parts of Cairo, having abandoned their posts on Friday.
Amid the protesters' call for a general strike, banks, schools, many businesses and the stock market were closed for a second day, with queues forming outside food stores.
There are reports that train services in Egypt have been halted between the curfew hours of 1500 and 0800. EgyptAir said it was cancelling all domestic and international flights between the curfew hours.
Thousands of people have also rallied in Alexandria, and there have been sizeable demonstrations in Mansoura, Damanhour and Suez.
Israel has agreed to allow Egypt to deploy 800 more troops to the Sinai, the first such deployment since the 1979 peace deal. The troops will ring the Red Sea resort of Sharm el-Sheikh.
Israeli PM Benjamin Netanyahu warned against the takeover of Egypt by "an organised Islamic group" as had happened in Iran.
The "protest of the millions" march is set to go ahead on Tuesday in Cairo, with reports that Alexandria will also have a mass march.
However, there have been some signs of disagreement within the opposition, with the largest group, the Muslim Brotherhood, appearing to go back on its endorsement of leading figure Mohamed ElBaradei as a negotiator with Mr Mubarak.
A spokesman for the Muslim Brotherhood, Mohamed Morsy, told the BBC: "The Muslim Brotherhood is much stronger than Mohamed ElBaradei."
The death toll from the protests so far is hard to assess but is thought to be at least 100.
Many countries are evacuating citizens, leading to chaotic scenes at Cairo airport as air traffic becomes congested and flights are cancelled or delayed.
Tourism remains a vital sector in the Egyptian economy, accounting for about 5-6% of GDP.
The US has been evacuating diplomatic staff and citizens through Cyprus.
International pressure is growing for some kind of resolution.
US President Barack Obama and his Secretary of State Hillary Clinton have talked about the need for an "orderly transition" to a democratic future for Egypt.
EU foreign policy chief Baroness Ashton said on Monday that the "legitimate grievances" of Egyptians should be heeded.
"Their aspirations for a just, for a better future should be met with urgent, concrete and decisive answers and with real steps," she said.
The unrest in Egypt follows the uprising in Tunisia which ousted President Zine al-Abidine Ben Ali two weeks ago after 23 years in power.