After the largest anti-government protests in nearly 20 years, Than Shwe, whose loathing for Aung San Suu Kyi is well known, offered direct talks if she abandoned "confrontation" as well as support for sanctions against the country and "utter devastation".
Analysts cautioned against optimism as hopes of change in the past had been dashed.
"Where are the peace and human rights defenders of the world (the super powers)? They haven't done enough in this case. Isn't there oil in Myanmar?"
Lost Soldier, Arusha, Tanzania
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"It's too early to assess this gambit by the regime," a retired professor said. "It comes at a time of mounting pressure from the international community. We need to wait for further movement."
There has been no word from Aung San Suu Kyi, 62, who has spent 12 of the past 18 years in detention.
She is confined to her house in Yangon without a telephone and requires official permission - granted rarely - to receive visitors.
The New Light of Myanmar, the generals' official mouthpiece, suggested on Monday that Aung San Suu Kyi would remain under house arrest until a new constitution was approved - a dim and distant prospect, according to most analysts.
It also gave short shrift to the demands of the thousands who joined last month's protests crushed by the army.
"The three demands of the protesters - lowering consumer prices, release of Daw Aung San Suu Kyi and political prisoners, and national reconciliation - cannot be satisfied through protest," the paper said in a commentary.
"Now, those responsible are making arrangements to draft the state constitution and collect the list of voters," it added.
"When the state constitution is approved, the fulfilment of the three demands will be within reach."
The military government has cut security in Yangon steadily since it sent in soldiers 10 days ago to end the biggest anti-government protests since 1988.
Official media say 10 people were killed, although foreign governments and dissident groups say the toll is likely much higher.
In 1988, up to 3,000 people are thought to have died in a crackdown over several weeks on protests led by students.