The transition must include a negotiations process with a broad cross-section of the Egyptian people, including opposition leaders, addressing freedoms that Egyptians seek and constitutional changes that facilitate a more open, democratic process, Gibbs said.
Gibbs said it wasn't for him or the U.S. government to decide if "transition" includes the departure of Egyptian President Hosni Mubarak.
"That is not for our government to determine; that is for the (Egyptian) people to determine," Gibbs said during a news briefing.
"Transition in this case means change," Gibbs said, adding that a departure by Mubarak is "not necessarily part of what that change... that freedom looks like."
President Obama was being updated as necessary on the situation, Gibbs said.
Gibbs did not directly answer whether Mubarak's naming new cabinet members was enough.
"I think it is obvious there's more work to be done," he said.
He said the administration was pleased restraint seems to have taken hold "even as we see reports of increased participation by protesters. ... Our belief is that, first and foremost, (protests) have to be conducted with non-violence."
The Egyptian people are voicing "legitimate concerns and grievances" that must be addressed by government, Gibbs said.
"But we're not picking between those on the street and those in government," he said.