"The vast majority of our people, including chiefs and others, are now protesting that I can't step aside without their approval," the Liberian warlord-turned-president told reporters in Monrovia, Liberia's capital.
Taylor's announcement, on a radio and TV call-in show, drew heated challenges from listeners, who called in to accuse the president of going back on a pledge he had made June 4 at the start of a peace conference for Liberia.
"I said I was 'prepared' to step aside," Taylor answered, stressing "prepared." "I didn't say I was not going to run."
Taylor also announced Friday he would yield power at the end of his term only to his Vice President Moses Blah, keeping power in the hands of Taylor's political party.
Blah, who sat nearby nodding approval as Taylor talked, would preside over elections at some indefinite date, Taylor said.
"I have a large following in this country," Taylor said. "It is in the interest of peace that I'm prepared to step aside, but let nobody think that our backs are against the wall, so we are going to accept anything."
Taylor's comments marked a significant retreat from his contrition at the opening of the Liberian peace conference, when Taylor drew applause from fellow African leaders by announcing he would quit.
"Not an option," Eugene Wilson, a spokesman for one of Liberia's two rebel groups, said of Taylor's announcement he would stay in power.
"According to the cease-fire, Mr. Taylor will step aside after a transitional government has been formed, and he has no choice than to agree on the political agreement that will emerge in Accra," Wilson said.
The cease-fire accord signed Tuesday by Taylor's government and rebels committed them to political discussions within 30 days, leading to a transitional government that excluded Taylor.
On June 4, Taylor spoke to delegates and African leaders at the start of talks in Accra, Ghana, for ending Liberia's three-year rebellion.
Hours before the opening of that conference, a U.N.-Sierra Leone war-crimes court announced Taylor's indictment for backing a vicious rebel movement in neighboring Sierra Leone and urged authorities in Ghana to arrest him.
"If President Taylor is seen as a problem, then I will remove myself," Taylor declared on June 4, speaking of himself in the third person. "I'm doing this because I'm tired of the people dying. I can no longer see this genocide in Liberia."
"It has become apparent that some people believe that Taylor is the problem. President Taylor wants to say that he intends to remove himself from the process," Taylor said then.
Ominously, Taylor blamed Sierra Leone for the indictment, and also accused the neighboring country of letting itself be used as a base for attacks by Liberia's rebels.
Sierra Leone is newly returning to peace, after a 10-year terror campaign by the brutal rebels allegedly backed by Taylor. The campaign killed tens of thousands, and left thousands mutilated by the rebels' signature atrocity, the hacking off of limbs with machetes.
United Nations authorities accuse Taylor of gun- and diamond-trafficking with rebels in Sierra Leone. Liberia's rebels largely are believed to be backed by neighboring countries Guinea and Ivory Coast, but not by Sierra Leone.
"This indictment is not versus Charles Taylor," Taylor said Friday. "It is Sierra Leonean vs. Liberia. This will bring confusion between the two countries for years and years to come."
"The Liberian government has launched a formal complaint to Sierra Leone for allowing use of its territory as a launching pad," he added.
Taylor warned that disarming in Liberia's own war, as called for in the new accord, was in doubt as long as the war-crimes indictment against him stood.
Claiming 40,000 fighters under his command, he proclaimed the forces "will not feel comfortable" if Taylor "is indicted and a war criminal."
Liberia, a nation of 3.3 million people, is Africa's oldest republic, founded by former American slaves in 1821.
In 1989, Taylor launched an insurrection with Libyan backing that plunged the nation into a 7-year civil war that killed at least 150,000 people.
He emerged from the civil war as Liberia's strongest warlord and won presidential elections the following year — elected in part by people who feared he would renew the war if he lost.
But the country saw only two years of peace before the latest rebellion erupted in 1999.
Since then, more than 1.3 million Liberians have been uprooted, hundreds of thousands have fled into neighboring countries. Rights groups say both sides in the war have killed, raped, robbed and kidnapped civilians.