Mr Obama said Egypt's president of 30 years recognised the status quo was "not sustainable and change must take place".

Mr Mubarak said he would not contest September's elections following several days of mass demonstrations against his rule.

But protesters say they want the president to stand down immediately.

Mr Obama spoke to Mr Mubarak for half an hour by telephone after America's long-term ally announced his plans to move aside later this year.

"After his speech tonight, I spoke directly to President Mubarak," Mr Obama said in an address at the White House.

"What is clear and what I indicated tonight to President Mubarak is my belief that an orderly transition must be meaningful, it must be peaceful and it must begin now."

Egypt has been a key ally of the US in the Middle East and the go-to guy for America's peace drive between Israel and the Palestinians.

But Mr Obama sent an envoy to Egypt on Tuesday to urge the president to prepare for a transition of power.