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In Egypt: Will dialogue resolve the conflict? (+video)

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Senior Brotherhood official Mahmoud Ghozlan said the latest court ruling was linked to the army: "It is part of a power struggle between the military council and the president who represents the people and in which the military council is using the law and the judiciary to impose its will," he told Reuters.

In a war of attrition that may play out over years, Islamists long suppressed by Mubarak and his military predecessors are seeking to push generals out of politics and reform a wider establishment still filled with Mubarak-era officials.

Protests in Cairo's Tahrir Square, which had gathered in support of Mursi's decree earlier in the evening, swiftly turned to chants against the court ruling: "Void, void," they shouted.

The Brotherhood signalled it would not retreat.

Presidential legal adviser Mohamed Fouad Gadallah told Al-Ahram newspaper's website it was "not within the competences of the constitutional court" to assess the president's decree.

Brotherhood lawyer Abdel Moneim Abdel Maqsoud said his group respected the law: "But we also confirm we will continue to fight in all ways to defend what is right," he said.

A member of the Brotherhood's Freedom and Justice Party, Ahmed Abu Baraka, called the court ruling "political thuggery".

'Dangerous Game'

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