Fijian PM Laisenia Qarase has returned to the capital Suva amid claims by army chief Cmdr Frank Bainimarama that he is now in charge of the country.
Suva residents are hoping for a peaceful resolution to the impasse
He had spent the previous day in hiding after a 24-hour deadline for avoiding a military coup set by Cmdr Bainimarama passed without incident.
Fiji has been tense for weeks amid a stand-off between the two men.
Mr Qarase said he hoped that dialogue would continue between the government and the military.
"I will try my best to be in power for the next four and a half years," he added when asked whether he would still be in power next week.
However, Cmdr Bainimarama told the Fiji Sun newspaper that he would be the one setting the deadline not the prime minister. "I am his boss," he said.
Prime Minister Qarase told Reuters news agency on Friday: "The deadline has now passed. I have been informed that the new deadline is Monday midday."
But the military chief told AP news agency that Mr Qarase had no reason to claim a reprieve.
"Who's saying the deadline has been extended?" he asked. "Is he the commander? I am the commander," he added.
Cmdr Bainimarama had threatened to stage a coup after accusing PM Laisenia Qarase of stalling on a pledge to scrap controversial legislation.
It offers a pardon to people involved in a coup in 2000 and allocates the ownership of coastal land to ethnic Fijians.
The current military chief was a target of the troubles six years ago - a short-lived attempt to install a government of ethnic Fijians.
FIJI TENSIONS TIMELINE
2000 Brief coup put down by army chief Bainimarama
12 July 2005 Cmdr Bainimarama warns he will topple government if it pardons jailed coup plotters
13 July 2005 PM Laisenia Qarase says he will review law pardoning plotters
17 May 2006 Mr Qarase wins re-election
31 Oct Mr Qarase tries - and fails - to replace Cmdr Bainimarama as army chief
4 November Mr Qarase says he will change law offering clemency to coup plotters
7 November Military calls for police chief to quit
30 November Mr Qarase offers "concessions" after meeting Cmdr Bainimarama
30 November Cmdr Bainimarama warns of coup if demands not met
As the deadline set for the coup passed, Pacific Islands Forum foreign ministers met in Sydney to discuss the crisis.
Australian Foreign Minister Alexander Downer said it would show Cmdr Bainimarama they wanted respect for the rule of law and democracy.
"Every effort has been made to try to conciliate him and try to talk him out of mounting a coup," he told ABC radio.
"But I must say, he has shown scant interest in drawing back from his plans," he added.
The military has warned foreign countries against intervening in Fiji.
Mr Qarase said he was prepared to review - and eventually abandon - the laws that have provoked Cmdr Bainimarama.
But the military chief questioned Mr Qarase's readiness to act on his pledge.
Fijians have been buying emergency supplies of food and withdrawing money from banks, amid fears a military coup could bring chaos and closures.