Egypt's Supreme Judicial Council has said President Muhammad Morsi's assumption of sweeping powers should be limited to "acts of sovereignty."
The council said such acts would include decisions related to foreign affairs and national security.
The council also asked the country's judges to return to work after an association of Egyptian judges earlier called for "the suspension of work in all courts and prosecution administrations" to protest Morsi’s decree.
The decree, issued on November 22, bars any legal challenges to presidential decisions until a new parliament is elected. It also prevents courts from dissolving a constituent assembly, dominated by Islamists, which is writing a new constitution.
Protests against Morsi have continued in recent days. Several hundred demonstrators rallied late on November 24 outside the Supreme Court in Cairo. Security forces were reported to have fired tear gas to disperse them.
The Egyptian stock exchange plummeted by some 9 percent on November 25.
Prominent opposition leader Muhammad ElBaradei said there can be no dialogue with the president until he rescinds what he called the “dictatorial” decree.
Morsi and his supporters say the decree was needed to protect last year’s revolution from being undermined by loyalists of former ruler Hosni Mubarak.
Speaking in an interview with Reuters and the Associated Press, ElBaradei, a Nobel Peace Prize winner and former chief of the United Nations nuclear watchdog organization, called the decree "repressive" and "abhorrent."
“I've spent all my life advocating dialogue, but there is no room for dialogue when a dictator imposes the most repressive, abhorrent measures and then says, ‘Let us split the difference.’ We cannot split any difference there. But we are, of course, ready for dialogue once he rescinds that, and then we can talk,” ElBaradei said.
ElBaradei, who met on November 24 with other leading pro-reform figures, said the opposition may have to escalate a campaign of peaceful civil disobedience.
"The core demand for now is to rescind the constitutional declaration. But if people were to ask me or to ask us, 'What do you want?' I mean, we clearly want a new constituent assembly, we want to be able to get a proper democratic constitution that guarantees our rights, our freedoms, a proper balance of power," ElBaradei said.
"And we want a qualified government, a government of national salvation to be able to get the country out of the mess we are in, particularly focusing on the economy and security."
ElBaradei said he met with Morsi last week. He said the president gave no indication that the decree would be issued -- something, ElBaradei said, that indicates a lack of “good will.”
ElBaradei called on the United States and European Union to issue a “strong” condemnation of the Egyptian president.
Morsi issued his decree days after he was praised by Washington for helping broker a cease-fire between Israel and Hamas after an outbreak of fighting in the Gaza Strip.
Both the opposition and the Muslim Brotherhood, which backs the president, have called for mass rallies on November 27.
Based on reporting by Reuters and AP