People remained on the streets in defiance of a curfew that kicked in at 6:00pm local time in Cairo, Alexandria and Suez and will run until 7:00am.
Mubarak was to address the nation last night.
Part of the Cairo headquarters of Egypt's ruling National Democratic Party (NDP) was set on fire and explosions and gunfire were heard in the capital, Al Jazeera reported. The broadcaster said some of the blasts may have been due to gas cylinders exploding in police cars that had been torched.
Mubarak "has asked the armed forces, in cooperation with the police, to implement the decision, and maintain security and secure public establishments and private property," Egyptian State TV said, referring to the curfew.
In Cairo, protesters poured out of mosques after Friday prayers and ran rampant through the streets, throwing stones and torching two police stations as police chased them with batons, firing tear gas, water cannons and rubber bullets.
In the canal city of Suez, protesters overran a police station, seized weapons and set fire to security force vehicles in fierce clashes in which a demonstrator was killed, witnesses said.
The nationwide demonstrations, inspired by the "Jasmine Revolution" in Tunisia, have swelled into the largest uprising in three decades, sending shockwaves across the region. Eight people have been killed, hundreds injured and some 1,000 arrested.
But in a hint that authorities might heed the rising tide of popular anger, a senior lawmaker and member of the ruling party called for "unprecedented reforms" in order to stave off a revolution.
As the violence raged, Mustafa al-Fekki, National Democratic Party (NDP) member and chairman of parliament's foreign affairs committee, said security forces alone could not prevent revolution in Egypt, that reform was necessary.
"Nowhere in the world can the security forces put an end to revolution," he said in remarks to Al Jazeera.
"The security option alone is not sufficient, and the president is the only one to put an end to these events," he added, calling for "unprecedented reform."
The White House said Friday it was "very concerned" about events in Egypt.
"Very concerned about violence in Egypt - government must respect the rights of the Egyptian people & turn on social networking and internet," press secretary Robert Gibbs said in a Twitter message.
US President Barack Obama said Thursday that "violence is not the answer in solving these problems in Egypt" and that it was "absolutely critical" for Mubarak to move towards political reform.
Egypt is one of Washington's closest allies in the region, but analysts say the United States is growing increasingly concerned that its refusal to implement more political reforms could lead to further unrest and instability.
Mubarak, aged 82 and said to be in poor health, has not been seen publicly since the unrest erupted.
Demonstrations spread around the capital of Cairo, where police appeared overwhelmed as protesters broke through several police barriers.
Protesters were seen being dragged away and pushed into police vans, as others defied the heavy police presence and made their way to the central Tahrir Square.
Leading opposition figure Mohamed ElBaradei, who has said he would be prepared to lead a transitional authority if he were asked, was among a crowd of around 2,000 targeted by police and was forced to take refuge inside a mosque in Giza Square and not allowed to leave.
In Alexandria, protesters threw stones at police after prayers with cries of "God is greatest" followed by "We don't want him," referring to Mubarak.
The crowd attacked police vans, torching one, after a civilian had most of his hand blown away, allegedly by police.
Protesters also set fire to a government building in a central part of the city.
In the Delta city of Mansura, hundreds chanted "Down with Mubarak" as they emerged from prayers, heavily outnumbered by security forces.
Some imams had encouraged worshippers to "go out and seek change," an AFP correspondent reported.
In another Delta city, Damietta, tens of thousands protested and set fire to the NDP headquarters, witnesses said.
Egypt's largest opposition group, the banned Muslim Brotherhood, has also joined the uprising, and at least 20 of its members were arrested overnight, a lawyer for the group said.