DAMASCUS (Reuters) - Syrian President Bashar al-Assad accepted his government's resignation on Tuesday after nearly two weeks of pro-democracy unrest that has posed the gravest challenge to his 11-year rule.
But the move was unlikely to satisfy protester demands since the cabinet has little authority in Syria, where power is concentrated in the hands of Assad, his family and the security apparatus.
Tens of thousands of Syrians held pro-government rallies on Tuesday, awaiting a speech in which Assad was expected to announce a decision on lifting emergency laws that have served to crush dissent for almost 50 years.
That is a key demand of anti-government demonstrations in which more than 60 people have been killed.
"President Assad accepts the government's resignation," the state news agency SANA said, adding that Naji al-Otari, the prime minister since 2003, would remain caretaker until a new government was formed.
Protesters at first had limited their demands to greater freedoms. But, increasingly incensed by a security crackdown on them, especially in the southern city of Deraa where protests first erupted, they now call for the "downfall of the regime."
The calls echo those sounded during the uprisings buffeting the Arab world that, since January, have toppled veteran autocratic presidents in Tunisia and Egypt and also motivate rebels fighting Libyan leader Muammar Gaddafi.
Syrian state television showed people in the Syrian capital Damascus and in Aleppo, Hama and Hasaka waving the national flag, pictures of Assad and chanting "God, Syria, Bashar."
"Breaking News: the conspiracy has failed!" declared one banner, echoing government accusations that foreign elements and armed gangs are behind the unrest. "With our blood and our souls we protect our national unity," another said.
Employees and members of unions controlled by Assad's Baath Party, which has been in power since a 1963 coup, said they had been ordered to attend the rallies, where there was a heavy presence of security police.
All gatherings and demonstrations not sponsored by the state are banned in Syria, a country of 22 million at the sensitive heart of generations of Middle East conflict.
Media organisations operate in Syria under restrictions. The government has expelled three Reuters journalists in recent days -- its senior foreign correspondent in Damascus and then a two-man television crew who were detained for two days before being deported back to their home base in neighboring Lebanon.
FEARS OF SECTARIAN VIOLENCE
More than two hundred protesters gathered in Deraa chanting "God, Syria, and Freedom" and "O Hauran rise up in revolt," a reference to the plateau where Deraa is located.
Deraa is a center of tribes belonging to Syria's Sunni Muslim majority, many of whom resent the power and wealth amassed by the elite of the Alawite minority to which Assad belongs. Latakia, a religiously mixed port city, has also seen clashes, raising fears the unrest could take on sectarian tones.
The government has said Syria is the target of a project to sow sectarian strife.
"If things go south in Syria, bloodthirsty sectarian demons risk being unleashed and the entire region could be consumed in an orgy of violence," wrote Patrick Seale, author of a book on late president Hafez al-Assad, Bashar's father, on the Foreign Policy blog.
Bordered by Iraq, Jordan, Turkey, Lebanon and Israel, Syria maintains a strong anti-Israeli position through its alliances with Shi'ite Muslim regional heavyweight Iran and Lebanon's Hezbollah, as well as Palestinian Islamist militant group Hamas. It has also reasserted influence in smaller neighbor Lebanon.
Vice President Farouq al-Shara said on Monday the 45-year-old president would give a speech in the next 48 hours that would "assure the people."
Last week Assad made a pledge to look into ending emergency laws, consider drafting laws on greater political and media freedom, and raise living standards. But the increasingly emboldened protesters have not been mollified.
However Syrian officials, civic rights activists and diplomats doubt that Assad, who contained a Kurdish uprising in the north in 2004, would completely abolish emergency laws without replacing them with similar legislation.
Emergency laws have been used since 1963 to stifle political opposition, justify arbitrary arrest and give free rein to a pervasive security apparatus.
Protesters want political prisoners freed, and to know the fate of tens of thousands who disappeared in the 1980s.
The British-educated president was welcomed as a "reformer" when he replaced his father in 2000. He allowed a short-lived "Damascus Spring" in which he briefly tolerated political debates that openly criticized Syria's autocratic rule, but later cracked down on critics.
WEST'S HANDS TIED
In Deraa, demonstrators have destroyed a statue of Hafez al-Assad, remembered for his intolerance of dissent.
In 1982 he sent in troops to quell an armed uprising by the Muslim Brotherhood, killing thousands of people and razing part of the conservative city of Hama to the ground.
Even Hama has been hit by the new protest wave and Assad had to deploy the army for the first time in Latakia, after clashes in which officials said at least 12 people had been killed last week. Assad's crackdown on protests. the likes of which would have been unthinkable two months ago in rigorously-controlled Syria, has drawn international condemnation.
But, realistically, Syria is unlikely to face the kind of foreign military intervention seen in Libya.
By cultivating a rapprochement with the West in recent years, while at the same time consolidating its ties with anti-Israeli allies Iran, Hezbollah and Hamas, Syria poses a headache for the West which has few options beyond condemning the violence and making calls for political reforms.
France, colonial ruler until 1946, led the rehabilitation of Damascus following the 2005 assassination of Lebanese statesman Rafik al-Hariri, for which initial investigations have implicated Syrian and pro-Syrian Lebanese officials.
The United States, long critical of Syria's support for anti-Israeli militant groups and its involvement in Lebanon, restored full diplomatic relations by sending an ambassador to Damascus in January after a nearly six-year gap.
"Iran is very involved with this regime. Iran would defend it with all means possible," said Antoine Basbous, head of the Paris-based Observatory of Arab countries.
"What's at stake if the Syrian regime falls is not just a matter of Syria internally, the stakes are above all geopolitical ones on a regional scale."
(Additional reporting by Khaled Yacoub Oweis in Amman, Dominic Evans in Beirut and Catherine Bremer in Paris; writing by Yara Bayoumy; editing by Mark Heinrich)