CAIRO – The U.S. increased pressure Friday on Egypt’s military rulers to hand over power to civilian leaders, and the generals turned to a Mubarak-era politician to head a new government in a move that failed to satisfy the more than 100,000 protesters who jammed Tahrir Square in the biggest rally yet this week.

The demonstrators rejected the appointment of Kamal el-Ganzouri as prime minister, breaking into chants of “Illegitimate! Illegitimate!” and setting up a showdown between the two sides only three days before key parliamentary elections.

The size of the rally and the resilience of protesters in the face of the violence used by security forces in this week’s deadly street battles have won back for the movement much of the strength it projected during the 18-day uprising that ousted President Hosni Mubarak in February.

Showing the sort of resolve from Arab Spring’s earliest days, the protesters say they will not leave the iconic square until the military rulers led by Field Marshal Hussein Tantawi step down and a civilian presidential council is formed to run the country until a new leader is elected.

“They stole our January revolution because we did not agree on who should represent us,” said activist Sedeeqah Abu Seadah. “We shouted ‘erhal’ (‘leave’) but did not shout the name of the person we want.”

The military’s appointment of el-Ganzouri, its apology for the death of protesters and a series of partial concessions in the past two days suggest that the generals are struggling to overcome the most serious challenge to their nine-month rule, with fewer options now available to them.

Significantly adding to their predicament, the Obama administration brought its position on the crisis in Egypt closer to the protesters’ demands, urging the military to fully empower the next interim civilian government.

“We believe that Egypt’s transition to democracy must continue, with elections proceeding expeditiously, and all necessary measures taken to ensure security and prevent intimidation,” the White House said in a statement.

“Most importantly, we believe that the full transfer of power to a civilian government must take place in a just and inclusive manner that responds to the legitimate aspirations of the Egyptian people, as soon as possible,” it said.

The adjustment in the Obama administration’s approach is significant because the Egyptian military, the nation’s most powerful institution, has in the past 30 years forged close relations with successive U.S. administrations, receiving $1.3 billion annually in aid. It followed the public U.S. endorsement of the military’s original timetable for the transfer of power by late 2012 or early 2013.

The choice of el-Ganzouri, who served as prime minister under Mubarak from 1996 to 1999, deepened the anger of the protesters, already seething over the military’s perceived reluctance to dismantle the legacy of Mubarak’s 29-year rule.

Hundreds of protesters moved from Tahrir Square and began a sit-in outside Cabinet headquarters, a few blocks away, vowing to keep el-Ganzouri from entering. “Military men must not rule,” the crowd chanted.

The protest movement launched an attempt to unify its demands and present an alternative to el-Ganzouri. Twenty-four protest groups, including two political parties, said they were creating their own “national salvation” government. They said it would be headed by a presidential council led by Nobel Peace laureate Mohamed ElBaradei with deputies from across the political spectrum to which they demanded the military hand over power.

“El-Ganzouri is over and done with. We want young people to take charge of the country,” said lawyer Hamdi Arban, 50, in Tahrir Square. “We will stay here and we won’t get our rights except from here.”

Basma el-Husseini, who directs a cultural center and was also in Tahrir, dismissed el-Ganzouri, 78, as a man with little energy to keep up with the challenges facing Egypt. “They (the generals) don’t get the power of the people. All they are doing now is play for time to make people fed up.”

Addressing a televised news conference, el-Ganzouri said the military has given him greater powers than his predecessor, Essam Sharaf, who was installed by the military months ago and has been criticized as a facade for the council of generals.

El-Ganzouri insisted he wouldn’t have accepted the job if he believed Tantawi had any intention of staying in power.

“The powers given to me exceed any similar mandates,” he said. “I will take full authority so I’m able to serve my country.”

But el-Ganzouri appeared uncomfortable, grasping for words and repeatedly pausing as he spoke, giving rambling answers when pressed whether he could form a government that will satisfy the public when many prominent figures have shunned joining the new administration.

The military inadvertently sparked the ongoing unrest by pushing a political “guardianship” role for itself and immunity from civilian oversight even after a new parliament is seated and a new president is elected.

The last straw came when the military ordered the use of force against a small protest in Tahrir Square last weekend and then launched a failed, joint army-police raid to evacuate a larger crowd. Nearly 40 protesters have died in the past week.

The latest crisis has overshadowed Monday’s start of Egypt’s first parliamentary elections since Tantawi replaced Mubarak. The vote, which the generals say will be held on schedule despite the unrest, is now seen by many activists to be serving the military’s efforts to project an image of itself as the nation’s saviors and true democrats.

The next parliament is expected to be dominated by Islamists, whose political groups have decided to boycott the ongoing protests to keep from doing anything to derail the election. But the outcome of the vote is likely to be seen as flawed, given the growing unrest and the suspension by many candidates of their campaigns in solidarity with the protesters.