President Fernando de la Rua of Argentina resigned last night after two days of rioting and looting that have claimed at least 22 lives.
With Argentina teetering on the brink of the world's biggest sovereign debt default, Mr de la Rua resigned after the main opposition Peronist Party refused to support his call for a unity government.
The violence erupted after protests against soaring unemployment and a bank freeze imposed three weeks ago by the Economy Minister, Mr Domingo Cavallo, who resigned early yesterday.
The crisis in Latin America's second-largest economy worsened after the International Monetary Fund refused earlier this month to pay a further $1.3 billion from a bail-out package because of massive overspending by the government.
In the fourth year of recession, Argentina has $132 billion in debt, one seventh of all debt held by developing countries, but has been unable to raise enough taxes to pay off its loans.
The resignation of Mr Cavallo and the entire cabinet forced the President to attempt to restructure his fragile administration. But his efforts failed when he was snubbed by the Peronists and other opposition parties. Mr de la Rua unsuccessfully called on the opposition Peronists, who control the nation's congress and key governorships, to "make a show of generosity".
Members of the Senate and Chamber of Deputies will meet in a joint session today to elect an interim president who will serve until December 2003 when Mr de la Rua's term officially ends.
The deaths occurred at the hands of shopowners and guards during 48 hours of looting throughout the country. Among the victims, eight were killed in Buenos Aires, five more in Santa Fe province, one in Corrientes in the north-east and another victim in Rio Negro, in southern Argentina. Outside the presidential palace, two protesters were shot dead by police trying to prevent crowds from entering the building.
A federal judge ordered the release of 42 people, including two children, who were detained outside the presidential palace.
"Out, Out, Out," chanted thousands of protesters in front of the presidential palace, demanding the resignation of Mr de la Rua. Protesters cited wage and pension cuts implemented to pay off public debt as the immediate sparks that ignited the current violence.
Rioters protesting against government austerity measures yesterday set fire to two major bank buildings in central Buenos Aires just blocks from the Presidential Palace. The crowds defied martial law, teargas and flaming summer heat as mounted police repeatedly charged the crowds, who dispersed through nearby streets, only to regroup minutes later.
People fired missiles at police from neighbouring balconies while fresh graffiti was painted on walls and traffic signs. Supermarkets remained shut yesterday or posted armed guards at the entrances, but looting was reported late into the evening.
Mr de la Rua's private secretary, Mr Nicolas Gallo, the only government official available for comment, defended the police action taken against protesters, saying that "most people want to go to work" and that the nation "deserved a minute's respite" from the growing chaos. The words fell on deaf ears, as drivers honked their horns and housewives banged empty saucepans, the crowds growing by the moment.
Those detained included Mr Gustavo Lesbegueris, the deputy ombudsman, who was peacefully demonstrating when plainclothes police picked him out of the crowd.
Under the 30-day state of siege imposed on Wednesday authorities can detain at will anyone protesting in public.
President Bush expressed "concern" yesterday at the unfolding events "The President considers Argentina a valued ally and friend," said the White House spokesman, Mr Ari Fleischer.