Egypt will hold its first multiparty elections in the fall, one example of their movement toward democracy and reform, but critics are skeptical of whether the elections will truly be democratic.

MARGARET WARNER: The streets of Cairo are jammed these days, not only with the city's notorious traffic, but with demonstrators demanding democracy. Satellite TV this year let Egyptians see many of their Arab neighbors taking part in free elections for the first time. And the Bush administration has stepped up the heat on Egypt, Washington's key Arab ally, to open up its political process.

PRESIDENT GEORGE W. BUSH: And the great and proud nation of Egypt, which showed the way toward peace in the Middle East, can now show the way toward democracy in the Middle East.

MARGARET WARNER: It all adds up to the toughest pressure for political change ever on Egyptian President Hosni Mubarak as he faces reelection in September. After Islamic radicals assassinated his predecessor 24 years ago, Mubarak imposed emergency rule. It kept a tight lid on political dissent while his security forces battled Islamic extremists.

So it was something of a surprise when Mubarak announced in February that, for the first time, he'd let other names appear on the September presidential ballot. Mubarak hasn't officially declared he'll run, but he's widely expected to. But did Mubarak go far enough? How free and fair will Egypt's election be?

I explored those questions recently with the Egyptian ambassador to Washington, Nabil Fahmy, and a leading Egyptian dissident, Saad Ibrahim. Ibrahim's protests during Egypt's last presidential election landed him in jail for three years until pressure from the U.S. helped secure his release.

MARGARET WARNER: Ibrahim he said he's pleased by Mubarak's decision.

SAAD IBRAHIM: For him to take this step three months later was quite radical, even though it is by objective criteria a very small, very limited step. But for Mubarak, who is known to always think that he has given a mile when he only gives an inch, that was his mile. To us, as democrats, it was an inch, but a welcome inch.

MARGARET WARNER: What do you think led him to do that?

SAAD IBRAHIM: Pressure from within. Demonstrations were beginning to gain more frequency and bigger numbers. Also regional events -- the elections in Palestine, the elections in Iraq. Plus I think pressure from the West, especially the United States and the European Union.

MARGARET WARNER: Career diplomat Fahmy has been Egypt's ambassador to the U.S. for six years. He says Mubarak has been laying the groundwork for some time without pressure from Washington.

NABIL FAHMY: Of course, when the American president speaks, people listen. But if he was speaking without there being a foundation for change in Egypt that had already started, you wouldn't have found this resonance.

Frankly, this is an Egyptian decision. It's pushed by the fact that 56 percent of our population is 25 years and younger. This is a very young population that wants change. They want to be part of the world. They want to be heard. And they want to feel empowered in their own country. That's the main force behind it.

MARGARET WARNER: Saad Ibrahim is skeptical on that point.

SAAD IBRAHIM: I wish the Egyptian government was responding to its own people. He was not. He was responding to pressure. And I think it is good that he responds to pressure, because in the past, even pressure could not budge him.

NABIL FAHMY: Being 7,000 years old, we're criticized for a lot of things, but we've never been accused of doing things in a hurry. So this was not a reaction to a speech.

MARGARET WARNER: Whatever Mubarak's motives, his decision only intensified the protests. Activists say the election ground rules are rigged in favor of Mubarak, or his handpicked successor if he doesn't run.

SAAD IBRAHIM: I believe they will be more fair than previous elections. Whether it will be fair and free to the level that I want as a pro-democracy advocate, I doubt it, because there are still a lot of restrictions.

NABIL FAHMY: I don't think it's rigged in favor of President Mubarak. I don't think he, frankly, needs it to be rigged in his favor. This election, any party in Egypt can nominate any member of its leadership, and they were able to run against the majority party candidate, President Mubarak or otherwise, without any conditions.

MARGARET WARNER: But the minority parties in parliament are weak, and Ibrahim says the election rules make it virtually impossible for an independent candidate outside those parties to qualify for the ballot. Fahmy concedes that's so.

NABIL FAHMY: The law is, if you want, for lack of a better word, bias towards political parties. We're trying to get people to pursue participation in political parties rather than run as independents.

MARGARET WARNER: The most prominent potential rival at this stage is pro-democracy advocate Ayman Nour, leader of the new al-Ghad, or "Tomorrow" Party. But Nour, a member of parliament, has been charged with forgery by the government. His trial began in Cairo in late June.

AYMAN NOUR (Translated): It's obvious that they're trying to ruin my rights and reputation, to threaten my presidential campaign. I challenge President Mubarak and I will win even from behind these bars.

MARGARET WARNER: Is he going to be concluded with this process in time to be able to run and mount a credible campaign if he wants to?

NABIL FAHMY: I don't know, because it's in the hands of the courts.

MARGARET WARNER: The trial took a surprising turn shortly after it began, when a key government witness recanted, saying security agents had forced him to falsely implicate Nour. The judges then adjourned the trial until late September. That leaves Nour free to campaign, but under a cloud of a possible prison sentence if convicted.

Ibrahim says the charges against Nour typify the way the government abuses its authority to crush its opponents.

SAAD IBRAHIM: Every turn it could have to make, to tighten its grip and power, it will use.

MARGARET WARNER: Another example, Ibrahim cites: Opposition parties cannot engage in normal politicking.

SAAD IBRAHIM: They don't have freedom to organize rallies, to organize marches, to open branches, because, again, the emergency laws, which have been in existence for 24 years, restrict political action, restrict activities out in the street, grassroots organizing. You have to get a license for everything you do in Egypt from the state security. It is a police state in that.

MARGARET WARNER: When opponents do demonstrate without a license, he says, the gathering is broken up by police or ruling party thugs in plain clothes. After one violent crackdown in May, when women demonstrators were beaten, President Bush spoke out.

PRESIDENT GEORGE W. BUSH: And the idea of people expressing themselves in opposition to the government, and then getting a beating is not -- is not our view of how a democracy ought to work.

MARGARET WARNER: Mubarak's Egypt is an essential U.S. partner in the region, whether in shepherding the Middle East peace process or sending diplomats to Iraq. An Egyptian diplomat was assassinated there just last week.

So the Egyptian government hasn't taken kindly to the pressure for democracy from the Bush administration, as, for example, when Secretary of State Rice in Cairo last month pressed the government to let its opponents campaign more freely.

CONDOLEEZZA RICE: President Mubarak has unlocked the door for change. Now the Egyptian government must put its faith in its own people. We are all concerned for the future of Egypt's reforms when peaceful supporters of democracy, men and women, are not free from violence.

NABIL FAHMY: Nobody likes to be talked to publicly, and that applies to Americans, it applies to Egyptians, and everybody else. But that being said, the content of what she said is not something that we differ with. We don't have a problem with the call for more democracy. We're trying to do that.

MARGARET WARNER: Ibrahim says democracy activists were heartened by Rice's words, and hope the U.S. keeps up the pressure.

SAAD IBRAHIM: I think the statement by Dr. Rice in Cairo, in the American University in Cairo, was music to Egyptian democrats. It was highly and warmly welcomed. I am hoping that the peaceful pressure will be sustained and will grow, and will ultimately forge a regime for a more open society, for a freer society, for true and honest democratization.

MARGARET WARNER: Fahmy says opposition candidates will have equal access to the media, and that the Egyptian government will ease the rules restricting demonstrations.

Will they be changed in time for the election?

NABIL FAHMY: Of course. But there will have to be rule of law. It's not going to be chaos. That's not the idea of a democracy. But equal rights, freer access to assembly, yes, of course.

MARGARET WARNER: But Fahmy says the ongoing threat of radical Islam means political change must evolve slowly for Egypt's 75 million people. And the government won't let any religious party, like the outlawed Muslim brotherhood, run a candidate at all.

NABIL FAHMY: We're 7,000 years old as a people, but we've only been a republic for the last 50 years. We've been occupied for many years before that. We have a very low literacy rate. We have not had a democratic process for many years.

What we are concerned with is, in the absence of, if you want, the level of evolution, the maturity in the society that is required for a serious democratic debate.

MARGARET WARNER: Ibrahim dismisses the "go-slow" argument, saying the government is simply trying to maintain its grip on power.

SAAD IBRAHIM: Margaret, this is part of the scare tactics. Egypt has a higher education or literacy rate than India. Egypt has a higher income per capita than India. So to make that argument borders on the racist line that some people are ready and some people are not.

This is one. So to say that the Egyptians are not ready because of the high illiteracy rate or because of poverty is outright, again, excuses to ward off the democratic reform and to stay in power, to hold on to the status quo.

MARGARET WARNER: There's one final point of contention between Washington and Cairo: Whether Egypt will let international monitors observe the election. Fahmy says Cairo hasn't ruled out allowing monitors, but he counsels patience from the international community.

NABIL FAHMY: We're still learning how to do this. This election is not the end of the road. It is only, if you want, the midway. The majority party and the opposition parties, both will have to learn how to run an election, win an election and lose an election. This is much more than simply about this election.

MARGARET WARNER: But in this election, the government and dissidents agree: If Mubarak chooses to run, he isn't likely to lose.