Beijing will allow Hong Kong to directly elect its leader by 2017 and all its lawmakers by 2020, the territory's chief executive said Saturday, sparking protests by democracy activists who sought an earlier date.

"A timetable for obtaining universal suffrage has been set," the former British colony's leader, Donald Tsang, said. "Hong Kong is entering a most important chapter of its constitutional history."

The government in Beijing had this week been debating Hong Kong's political development, and in an announcement carried by the official Xinhua News Agency on Saturday, said it would allow direct elections for the territory's leader in 2017. Direct elections for all lawmakers could follow, it said, without giving a date, although Tsang said he would aim for 2020.

The announcement, although widely expected, dealt a blow to Hong Kong's opposition pro-democracy camp who had campaigned heavily for full democracy in 2012, the date of the next leadership and legislative polls.

Several hundred people marched through central Hong Kong to protest the decision, saying they had been cheated out of their right to full democracy. Holding banners that read "democracy delayed is democracy denied" they accused Beijing of failing to listen to the wishes of Hong Kong's 7 million people.

"We are extremely disappointed — you could say we are furious — about this decision in ruling out 2012," Democrat Party chairman Albert Ho told Hong Kong government-run RTHK radio station. "The wishes of the Hong Kong people have been totally ignored."

When Hong Kong returned to Chinese rule in 1997 it was granted a wide degree of autonomy and a pledge that it would ultimately be allowed to directly elect all of its legislators and its leader, although no date was ever given.

Only half of the 60-seat legislature is elected, and the territory's top leader, or chief executive, is chosen by an 800-strong committee full of Beijing loyalists.

In calling for direct elections in 2012, opposition democrats say the bustling financial center is mature enough to choose its own government. But Beijing and its allies in Hong Kong's legislature have appealed for a more gradual approach.

Tsang urged all parties to put aside their differences and start thinking about how to implement direct elections for the chief executive in 2017. "We must treasure this hard-earned opportunity," he said.

A task force will be set up to discuss how to amend electoral methods, with the first changes made in 2012, he said at the news conference.

No details about those changes were released, but political observers have said they could include expanding the committee that chooses the chief executive. Any changes need a two-thirds majority in the legislature to pass.

In Beijing, chairman of the Standing Committee Wu Bangguo, said introducing full democracy would ensure Hong Kong maintained its role as a vibrant cultural and financial center.

"Hong Kong remains the free and open economy with the most vitality throughout the world," Wu said, according to Xinhua News Agency.

Political observers were somewhat surprised by the announcement.

"Most people had expected Beijing would allow direct elections for the chief executive in 2017. But Donald (Tsang) has made it quite clear that they also have allowed direct elections for lawmakers by 2020," said Ivan Choy, a political analyst at the Chinese University.