Egypt: President Mohammed Morsi ‘annuls’ decree (VIDEO)

President Mohammed Morsi of Egypt agreed early Sunday to relinquish much of the controversial decree that gave him sweeping powers, CNN reported.

However, Morsi said next week's referendum on a draft constitution would still be held.

The announcement comes as Egyptians continue to protest the decree.

Prime Minister Hisham Qandil made the announcement, saying Egypt's ruling Muslim Brotherhood hopes to “modify” the November 22 decree that gave Morsi expanded powers, according to AFP.

However, AFP reported that Morsi was willing to postpone next weekend's referendum.

Morsi's decree prevented Egypt's judicial system from challenging his decisions, a move that led to the bloody uprising this week.

"The constitutional decree is annulled from this moment," said Selim al-Awa, who participated in the meeting with Morsi and high-ranking Egyptians, BBC reported.

Earlier, Egypt's army has called for talks to resolve the current crisis, warning that the country will otherwise be dragged down a "dark tunnel."

It is the first statement the military has made since protests broke out two and a half weeks ago, and according to the BBC, has raised fears that the armed forces may be considering intervention.

In the statement, read out on national TV, the army said it had a responsibility to "preserve the higher interests of the country and to secure and protect vital targets, public institutions and the interests of innocent citizens."

"The armed forces affirm that dialog is the best and only way to reach consensus," according to the BBC's translation.

"The opposite of that will bring us to a dark tunnel that will result in catastrophe, and that is something we will not allow."

Not everyone said the comments were a sign that the military planned to get involved in the crisis, in which it has remained mostly neutral so far.

One military source told Reuters that the army wasn't preparing for a greater role on the streets, while a senior official from the Muslim Brotherhood, President Mohamed Morsi's party, welcomed the army's statement as "balanced" and a confirmation that its loyalty lay with the people, not any one side.

More from GlobalPost: Things are getting weird in Egypt

Yet Egypt's state-owned Al Ahram newspaper has reported that Morsi is about to issue a decree that will give soldiers the power to arrest civilians in order to maintain public order, a development that Agence France Presse described as "ominous."

As GlobalPost reported yesterday, Egypt's main opposition groups have all declined Morsi's invitation to talks today, saying that they will not enter negotiations until the president rescinds his unpopular new powers and calls off the planned referendum on a controversial draft constitution.

Vice President Mahmud Mekki yesterday hinted that the government would be willing to postpone the referendum, which is currently scheduled for Dec. 15 – but that concession "would fall far short of meeting all the opposition's demands," Reuters said.

Meanwhile protesters continued to demonstrate outside Morsi's presidential palace in Cairo today, the BBC reported.

It follows a day of protests across the country on Friday, including clashes, in the provinces of Beheira, Sharqeya, and Assiut.

GlobalPost's correspondent in Cairo, Erin Cunningham, writes: "There have only been a couple of times since the revolution when protests of this nature – that are not formally planned to mark an anniversary or holiday – have taken place simultaneously in various places across the country. And it gives us an idea of the scope of the discontent."

This video from Ahram Online shows some of the rallies in Cairo yesterday: