Egypt's parliament has approved a constitutional amendment that will allow presidential elections to be contested for the first time.
As lawmakers debated the law, demonstrators protested outside
Under the new law, all 15 Egyptian opposition parties may put forward their candidate for the vote.
But the law imposes tough conditions on independent candidates - they would have to receive the backing of at least 65 members of parliament.
The opposition says a non-government candidate would not get this support.
The ruling National Democratic Party of President Hosni Mubarak has an overwhelming majority in parliament and an opposition candidate would therefore depend on the ruling party to back his candidacy.
Pro-reform rallies were held in Cairo as lawmakers debated the amendment.
The 454-member People's Assembly, Egypt's lower house of parliament, backed the amendment after the Shura Council upper house passed it on Sunday.
Under the new law, political parties have to have been in existence for five years before they can field candidates.
The rules also require candidates to collect the signatures of at least 300 elected officials from the People's Assembly, the Shura Council and local councils.
The Muslim Brotherhood, which is illegal but nevertheless makes up the most vigorous opposition in Egypt, had urged parliament to vote against the changes.
The government says the amendment is the start of a new democratic era, but opposition groups have criticised it as a gesture largely empty of meaning.
Pro-reform activists - including leftists, nationalists and Islamists - stepped up a campaign for constitutional and political reforms in the country in recent weeks.
The Brotherhood says police are holding 2,000 of their supporters after a series of political demonstrations across Egypt.
President Mubarak's announcement in February that the constitution would be changed to allow contested presidential elections was hailed as a reform.
Mr Mubarak proposed the amendment under domestic and US pressure to democratise the political system.
The next presidential election is scheduled for September, but Mr Mubarak has not said whether he planned to seek a fifth, six-year term in office.