Egypt military 'appoints Kamal Ganzouri as new PM'
The military council has said parliamentary elections will begin across Egypt next week as scheduled.
Clashes near Cairo's Tahrir Square have subsided but activists are calling for renewed protests on Friday.
Large numbers of demonstrators are spending the night in the square ahead of a mass rally after Friday prayers.
The Supreme Council of the Armed Forces (Scaf) is overseeing a transition to civilian rule following the ousting of President Hosni Mubarak in February.
Despite promises by the council to speed up the process, many Egyptians fear the military intends to cling to power.
Mr Ganzouri headed Egypt's government from 1996 to 1999 under Mr Mubarak.
Kevin Connolly BBE News, CairoEgypt's slow-motion revolution has taken a confusing turn - in which no-one is quite playing the role you would expect”
Military apology The BBC's Yolande Knell, in Cairo, says Mr Ganzouri was in talks with military leaders earlier on Thursday.
During his term as prime minister, he was known as the "minister of the poor" because he was seen as representing the less well-off, and he remains popular with Egyptians, she says.
Earlier on Thursday, military leaders apologised for the deaths of about 38 protesters in clashes with police since Saturday.
The violence has been the worst since February.
Maj Gen Muhammad al-Assar expressed "the regret and apology of the entire armed forces on the tragedy that occurred".
He added: "Our hearts bled for what happened. We hope that this crisis will end and, God willing, it will not be repeated again."
Activists are urging mass protests on what they call "the Friday of the last chance" to demand an immediate transfer to civilian rule. They want Monday's elections postponed until the military steps down.
However, many other Egyptians want elections to go ahead unhindered. The main opposition group, the Muslim Brotherhood, is not supporting the protests and expects to do well in the polls.
Much of the violence has taken place in a street leading from Tahrir Square to the interior ministry.
Soldiers have now set up barricades of cement, metal bars and barbed wire to separate protesters and security forces.
On Tuesday, Field Marshal Tantawi accepted the resignation of caretaker Prime Minister Essam Sharaf's cabinet and summoned political leaders to discuss a way forward.
He sought to defuse the protests by promising presidential elections by June - six months sooner than planned.