The former head of the U.N. nuclear watchdog told Al Jazeera in a phone interview that Mubarak's speech on Friday, in which he said he would form a new government, was "disappointing" for Egyptians.
ElBaradei, a possible candidate in Egypt's presidential election this year, flew back to Cairo from Vienna on Thursday amid unprecedented protests against President Hosni Mubarak's 30-year rule.
"The system of Hosni Mubarak has failed to achieve the political, economic and social demands of the Egyptian people and we want to build a new Egypt founded on freedom, democracy and social justice," he told Al Jazeera.
"The main demand is that President Mubarak announces clearly that he will resign, or that he will not run again."
Mubarak, whose government rules with emergency laws, ordered troops and tanks into cities on Friday night in an attempt to quell demonstrations.
In a television address on Friday night, Mubarak said he would address the grievances of the Egyptian people. He sacked the cabinet but made clear he intended to stay in power and he condemned the violence.
The cabinet met on Saturday to formalise the move.
ElBaradei said: "We have to place a framework for a transitional government in which a president whose main mission is to put in place a new democratic constitution is voted, after which new parliamentary elections would be held and Egypt starts a new era."
Suudi King backs Mubarak
Saudi Arabia's King Abdullah has expressed support for Egyptian President Hosni Mubarak in the face of massive protests, the official Saudi Press Agency (SPA) said on Saturday.
It said King Abdullah phoned Mubarak after days of massive anti-government protests in which demonstrators called for the Egyptian president to step down.
"No Arab or Muslim can tolerate any meddling in the security and stability of Arab and Muslim Egypt by those who infiltrated the people in the name of freedom of expression, exploiting it to inject their destructive hatred," SPA quoted King Abdullah as saying.
Egyptian authorities on Saturday extended the length of a curfew in Cairo, Alexandria and Suez so it runs from 4 p.m. (1400 GMT) to 8 a.m. (0600 GMT), state television said.
The Egyptian army said in a statement on Saturday that anyone violating a curfew imposed after days of anti-government protests would be in danger.