Omar Suleiman, whose appointment was announced by state television in Egypt, has traveled to Washington many times and is known well by U.S. officials.
Before word that Mubarak had picked a vice president for the first time since coming to power nearly 30 years ago, State Department spokesman P.J. Crowley said the U.S. wanted to see Mubarak fulfill his pledges of reform as protests swept the country. The president's Cabinet resigned on his orders.
"The Egyptian government can't reshuffle the deck and then stand pat," Crowley said on his Twitter account. "President Mubarak's words pledging reform must be followed by action."
Administration officials involved in monitoring the Egyptian developments met at the White House on Saturday morning. The meeting was chaired by White House national security adviser Tom Donilon and included Secretary of State Hillary Rodham Clinton.
The administration offered no immediate official reaction to Suleiman's elevation to vice president.
Suleiman has played an active role in the peace process, particularly in trying to arrange compromise between rival Palestinian factions, Fatah and Hamas. He has been at the forefront of the Egyptian effort to crackdown on arms smuggling from Egypt into Gaza.
Crowley on Saturday also said the Egyptian people "no longer accept the status quo. They are looking to their government for a meaningful process to foster real reform."
He said the U.S. was concerned about the potential violence - police opened fire on a massive crowd of protesters in downtown Cairo, killing at least one demonstrator - and urged restraint on all sides.
After sacking his Cabinet and promising changes, Mubarak had a 30-minute conversation with President Barack Obama on Friday. Obama then appealed to Mubarak to back away from violence against the protesters.
"I told him he has a responsibility to give meaning to those words; to take concrete steps and actions that deliver on that promise," Obama said.
"Violence will not address the grievances of the Egyptian people, and suppressing ideas never succeeds in making them go away," Obama said at the White House after speaking with Mubarak.
"All governments must maintain power through consent, not coercion," Obama said.
The president made his brief but forceful remarks at the end of a tense day of drama during which televisions around the world broadcast images of rioting protesters intent on ending Mubarak's 30-year rule, for many in the country a reign of poverty and repression. Mubarak responded by calling out the military, instituting a curfew that was largely ignored and cutting off cell phone networks and other forms of communication.
Egypt is a pivotal U.S. ally. Much is at stake, from Israel's security to the stability of the Suez Canal and the safety of thousands of Americans who live and work in Egypt.
The State Department issued a warning for Americans to defer all nonessential travel to Egypt. Egypt has been a critical ally in the volatile Middle East since making peace with Israel in 1978.
Since then the U.S. has plowed billions into the country to help it modernize its armed forces, and to strengthen regional security and stability. The U.S. has provided Egypt with F-16 jet fighters, as well as tanks, armored personnel carriers, Apache helicopters, anti-aircraft missile batteries, aerial surveillance aircraft and other equipment.
The White House said Friday that such assistance was now at risk and that the administration might cut the $1.5 billion in annual foreign aid sent to Egypt, depending on Mubarak's response to the demonstrations.
Mubarak has long faced calls from U.S. presidents to loosen his grip on the country he has ruled since replacing the assassinated President Anwar Sadat. But he has seen past U.S.-backed reforms in the region as a threat, wrote Ambassador Margaret Scobey in a May 19, 2009, memo to State Department officials in Washington.
"We have heard him lament the results of earlier U.S. efforts to encourage reform in the Islamic world. He can harken back to the Shah of Iran: the U.S. encouraged him to accept reforms, only to watch the country fall into the hands of revolutionary religious extremists," Scobey wrote in the memo, among thousands of documents recently by the whistle-blower website WikiLeaks.
Sen. John Kerry, a Democrat and chairman of the Senate Foreign Relations Committee, speaking on the sidelines of the World Economic Forum in Davos Switzerland, said Saturday he believes Mubarak must address the issues that matter to the people of Egypt.
"Dismissing the government doesn't speak to some of those challenges," he said.