Cairo, Egypt ? In a surprise and dramatic reversal, President Hosni Mubarak Saturday ordered the constitution changed to allow challengers on the ballot this fall, paving the way for the first-ever multiparty presidential elections in the world’s most populous Arab country.

An open election has long been a demand of the opposition but was repeatedly rejected by the ruling party, with Mubarak only last month dismissing calls for reform as “futile.”

The sudden shift was the first sign from the key U.S. ally that it was ready to participate in the democratic evolution in the Middle East, particularly after historic elections in Iraq and the Palestinian territories. Mubarak’s government has faced increasingly vocal opposition at home and growing friction with the United States over the lack of reform.

The United States cautiously welcomed the proposal.

But Mubarak’s order to parliament declared the amendment must state that any potential candidate be a member of an official political party and win the endorsement of parliament, which is dominated by the president’s ruling party.

Mubarak made the announcement in a nationally televised speech, surprising even some in his inner circle, one source close to the presidency said.

Mohammed Kamal, a leading member of the ruling party’s policy-making committee, said parliament would propose an amendment within two weeks, and a national referendum to approve it would be held within nine weeks.