Tom Barnett called it, back in 2006:
Let me give you the four scariest words I can't pronounce in Arabic: Egypt after Hosni Mubarak.
Osama picked the time (9/11), and Bush picked the venue (Iraq), but this fight between radical Islam and globalization's integrating forces was preordained the day Deng Xiaoping set in motion China's economic rise almost three decades ago. You can't rapidly add billions of new capitalists to the global economy and pretend the Islamic Middle East will remain queerly disconnected forever, somehow fire-walled from that borglike assimilation.
And so, while resistance may be ultimately futile, it will be bloody as hell in the meantime, with Cairo--not Tehran--likely to become the next big flash point in this Long War.
Mubarak's "emergency rule" dictatorship is deep into its third decade, making him one of Egypt's most durable pharaohs. His succession plan is clear: Son Gamal tries to replicate Beijing's model of economic reform, forestalling political reform.
Gamal is apparently now in England. For his part, his father appears to have dismissed most of his cabinet and appointed his intelligence chief, Omar Suleiman, as his new vice president.
Mubarak also appears to be letting the protests go on, provided protesters do not cross certain "red lines", such as storming government buildings.
The question that will have to be answered over the next few days is what model will Mubarak follow?
If he follows the Shah model: He'll do just enough damage to keep provoking the rioters as he barley hangs onto power over the next few weeks. The violence will increase, and slowly the military will come to side some faction of the protesters. In this scenario, Mubarak eventually succumbs to mob rule, and is forced into exile with a rough coalition of regime critics forced to step in to fill the vacuum.
If he follows the Gorbachev model: Mubarak will quickly accept that there is no way for him to hang onto power in the log term. He'll try to engineer a soft landing for the whole country and a graceful exit for himself. This is the model both that the U.S. probably prefers, and that virtually guarantees Mubarak a Noble Peace Prize.