The United States said Tuesday it hoped the Arab world would tackle reforms after the "example" of the Tunisian uprising as thousands of people rallied here and in Egypt to call for radical change.

"I certainly expect that we'll be using the Tunisian example" in talks with other Arab governments, said Assistant Secretary of State Jeffrey Feltman, the first senior foreign envoy to visit Tunisia since this month's uprising.

"The challenges being faced in many parts of the world, particularly in the Arab world, are the same and we hope people will be addressing these legitimate political, social, economic grievances," he told reporters.

Feltman, who met with Tunisian ministers and civil society figures during his visit, also said that only free and fair elections would strengthen and give credibility to the north African state's embattled leadership.

Thousands of protesters massed into central Tunis to call for the caretaker government put in place after the ouster of veteran president Zine El Abidine Ben Ali on January 14 to resign because of its links with the old regime.

"The battle will play out in Tunis. That's why we've come here. To bring down the government. We have to clean up everything," Lotsi Abbes told AFP.

Many of the protesters had come from impoverished rural regions in central Tunisia where the first social protests against Ben Ali started last month.

They also called for Ben Ali's powerful Constitutional Democratic Rally (RCD) party, which has dominated Tunisia for decades, to be abolished.

Some of the signs held up also indicated opposition to the US envoy's visit, reading: "Feltman go home!" and "No to US and French interference!"

Ben Ali fled to Saudi Arabia amid a wave of demonstrations that began when a 26-year-old fruit vendor set fire himself to protest police abuse.

The Arab world's first popular revolt in recent history has triggered similar protests across the region, particularly in Algeria, Egypt and Yemen.

Thousands of protesters took to the streets of central Cairo on Tuesday to demand the ouster of President Hosni Mubarak, as police fired tear gas.

Moncef Marzouki, an opposition leader who came to address the crowd in Tunis and has said he will run for president, was chased away and insulted by a group of protesters who called him an "agent of the French and the Americans."

Marzouki had returned to Tunisia from his exile in Paris last week.

A rally in favour of the new leadership was also broken up by a larger anti-government crowd in chaotic scenes along the central Avenue Bourguiba.

Hundreds of the protesters arrived in Tunis on Sunday and have spent two nights camped out in front of Prime Minister Mohammed Ghannouchi's offices in defiance of a curfew and a state of emergency banning public assemblies.

Their numbers swell during the day as they are joined by other malcontents.

The new government has announced unprecedented democratic freedoms for Tunisia after the end of Ben Ali's 23-year rule, but many people are angry that figures from the previous regime, like Ghannouchi, remain in the cabinet.

Army chief Rachid Ammar on Monday waded into the crowd of protesters and asked them to leave, warning a "power vacuum" could lead to dictatorship and promising the army would act as a "guarantor" for the revolution.

The government also said it was releasing 260 million euros (355 million dollars) for public works in central Tunisia and to compensate families of the dozens killed during Ben Ali's crackdown on the month-long uprising.

Tunisia is still in the midst of upheaval and many schools and universities, shut down by Ben Ali in a failed bid to stop the protests widening, have remained closed despite orders to begin re-opening this week.

Tunisia's second city, Sfax, has called a general strike for Tuesday.

Ghannouchi, who has been the prime minister since 1999 and is seen as a moderate, has said he will resign but only after organising the north African state's first democratic elections since independence from France in 1956.

He said the vote could be held in the next six months but has not set a date and under the constitution the vote should take place within two months.

Also on Tuesday, the head of the Senate, Abdallah Kallel, who has been under house arrest, formally resigned his post, the TAP state news agency reported.

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