The Egyptian Army faces a tough choice and a defining moment.  They have provided the power in their country since the armed forces overthrew the British-relic monarchy almost sixty years ago.  But do they stick with one of their own when he is an old man and deeply unpopular, or do they end up being governed by civilians for the first time ever?  Decisions, decisions:

Egypt’s most powerful and most secretive institution has so far given no hint of whether it will abandon the 82-year-old former air force commander and accede to protesters’ demand for his ouster after nearly three decades of autocratic rule.

But it will likely do whatever it takes to preserve its status as the final source of power in the country and the economic perks it gets from the regime and from the considerable sector of civilian business ventures it has carved out for itself.

The army is clearly torn.

If it asks Mubarak to spare the country more violence and step down, it would throw the door wide open to the possibility of the first civilian president, ending the hold it has had on power since a 1952 coup overthrew Egypt’s monarchy. Every president since has come from the military.

But dislodging protesters by force from Cairo’s central Tahrir Square, epicenter of the demonstrations, would portray the military in the same light as the widely hated police, risking a popular backlash that could taint its carefully guarded reputation as protector of the people.

According to Der Spiegel, Mohammed ElBaradei also knows that the army holds the keys to Egypt — and will soon begin wooing them to dump Mubarak.  He also has a message for Israel that continued good relations with Egypt depends on a Palestinian state:

ElBaradei is now calling for new leadership in Egypt and he says he is prepared to negotiate with the military. “The longer things continue with Mubarak, the clearer it becomes: The country is falling apart, politically and economically,” he told SPIEGEL. “I would prefer to speak to the army leadership soon,” the opposition politician said, to “explore” how we could achieve a peaceful transition without bloodshed.

ElBaradei also warned the Israeli government that it must accept the end of the Mubarak regime. “The Israelis should understand that it is in their long-term interest to have a democratic Egypt as a neighbor.” He also said it would be “prudent” for the Israelis to “acknowledge the legitimate interests of the Palestinians and to grant them their own state” for the sake of good relations with Cairo.

But ElBaradei tells CNN that a new Egyptian government won’t break off diplomatic relations with Israel … at least not immediately.  He calls any such suggestion a “myth”:

Well, negotiating with Hamas to get moderates to rise to power sounds like the same kind of wishful thinking that ElBaradei and his supporters use to claim that he can keep the Muslim Brotherhood in check. Will the army be convinced that a nonentity like ElBaradei, who had no success at all in “controlling” the Iranians as part of the IAEA, could possibly ride the tiger that a Muslim Brotherhood-run coalition civilian government would be? On the other hand, can the Army really make a long-term choice of an 82-year-old man in failing health whose very presence inflames the population and could fatally damage their standing with Egyptians?

There appear to be few choices here, and none of them good, for the army.

Update: Mubarak and the top leadership of the National Democratic Party have resigned their party posts:

The leadership of Egypt’s ruling National Democratic Party resigned on Saturday, including Gamal Mubarak, the son of President Hosni Mubarak whose rule has been shaken by days of protests, state television said.

Al Arabiya television said Mubarak had also resigned as head of the ruling party. This could not immediately be confirmed.

A party official could not confirm the Al Arabiya report but said that if Mubarak had resigned from the party it would not affect his position as president.

“These are two different positions,” the official said.

This looks more like a gesture to stoke confidence in Mubarak’s promise to not seek another term as president.  In his place is a reported political liberal, Hossam Badrawi.  Will that mollify the crowds?  More importantly, will it convince the army to stick with the regime?