The cautious U.S. approach to the unrest shaking its strategic Middle East ally has come at a cost, putting the Obama administration out of step with protesters who say the time is now for President Hosni Mubarak to make his exit.

"We have been very consistent from the beginning of this situation," Clinton told reporters on her airplane returning from a Munich security conference, where she appeared to soften U.S. pressure on Mubarak to step down.

"We want to see a process begun that will lead to an orderly transition that has milestones and concrete steps that lead us toward free and fair elections."

U.S. officials say their position is driven by realities on the ground in Egypt after some two weeks of unprecedented protests that threaten Mubarak's 30-year rule.

It is also driven in part by U.S. relations with Israel, the pivotal U.S. ally in the region which is watching nervously as unrest boils in the first Arab country to have signed a peace deal with the Jewish state.

With a government pledged to reform, an opposition with limited political experience, a constitutional process that mitigates against haste, and a crucial strategic role, Egypt's next steps must be considered carefully, U.S. officials say.

"This is important to kind of look over the horizon," Clinton said. "You don't want to get to September and have a failed election and then people feel: 'What did we do, what was the point of all of this?'"

Some supporters of Egypt's protests may already wonder what the point is after U.S. comments indicating the Obama administration believes now is the time for a political dialogue, not a revolution.

After a week of mounting U.S. pressure on Mubarak to, in President Barack Obama's words, "do the right thing," Clinton told her Munich audience the key now was preparing new elections -- a stance which might allow the 82-year-old president to remain in office through September.

Frank Wisner, the former diplomat dispatched by Obama last week to convey a personal message to Mubarak, was even more straightforward, saying Mubarak could still play a critical role in the weeks ahead as Egypt builds its new future.

That outcome, which also appears to be getting European backing, could outrage the tens of thousands of Egyptians demanding the immediate ouster of Mubarak, long a trusted U.S. ally seen as a key player in Middle East peace efforts and an opponent of Islamic fundamentalism.

Mubarak's point-man on the transition, new Vice President Omar Suleiman, is a former intelligence chief viewed with skepticism by many in the opposition movement but well known in Washington as a powerful ally of U.S. interests.

Obama on Sunday underscored his view that there was no time for turning back, saying in a television interview that Egypt "is not going to go back to what it was" before the crisis.

Clinton said those changes were already under way, noting that Mubarak, who has pledged not to run again for president, to take his son out of the running and to launch constitutional reforms, had responded seriously to U.S. calls to launch political change.

"Those are significant actions they have to be viewed as a very important set of steps that he has taken to keep the movement going in the direction that we see," Clinton said, although she said it remained to be seen whether they would satisfy Egyptians.

She also said the United States would not "prejudge" the political future for the Muslim Brotherhood, the mainstream Islamist group banned under Mubarak which agreed on Sunday to join the dialogue.

Robert Danin, a Middle East expert at the Council on Foreign Relations, said abating violence against protesters, new dialogue with the opposition and the mounting economic costs of Egypt's political impasse all likely informed the administration's shift of tactic.

"They are adjusting their speed to fit the terrain," Danin told Reuters "We're not haggling over whether (Mubarak) will go, we are haggling over the timing and the mechanism."

Both are key. Washington fears an immediate change at the top could, under Egypt's constitution, launch elections too early for fledgling opposition parties to prepare.
A slightly longer timeline -- say to the end of Mubarak's term in September -- could give important breathing room.

"I think with the concerted effort with the kind of timelines and concrete steps I'm calling for, it would be done," Clinton said, adding that popular "buy in" for the new order would be key.

The softer U.S. approach was condemned by Egyptian opposition leader Mohamed Elbaradei, who called it a "major setback" that could spur even angrier demonstrations.

Security expert Brian Katulis at the Center for American Progress said Washington has recognized it will take lengthy negotiation to refashion Egypt's political stage, meaning it will have to keep pressure on the government for some time to deliver real reform.

"The disparity of power between the current power elite in the government and security services on the one hand and the political opposition...is strong," Katulis said. "I don't see the current powers-that-be moving quickly to open things up."