By Marwa Awad
CAIRO (Reuters) - An Egyptian court on Tuesday tossed out a government decree allowing the army to arrest civilians, a setback to military rulers preparing for this week's formal handover to Mohamed Mursi, Egypt's first Islamist president.
The Muslim Brotherhood and other opponents of military rule were furious when the army-backed interim government empowered soldiers to arrest civilians, effectively reinstating Hosni Mubarak's hated state of emergency, which lapsed on May 31.
The deposed president had used emergency law throughout his 30 years in power to repress Islamists and other dissenters.
"The court has blocked the decision of the Justice Minister that gave military and military intelligence officers powers of arrest," said Cairo administrative court Judge Ali Fikry.
With Islamists and generals set for a long power struggle,
there was no indication the court ruling was part of any army-Brotherhood compromise on Egypt's future governance.
But Brotherhood officials said they had struck some accords with the generals on the president's prerogatives, on an assembly that is supposed to write a long-delayed constitution, and on the fate of the dissolved Islamist-dominated parliament.
The army council that has ruled Egypt since Mubarak's fall stripped the presidency of many of its powers in a decree issued just as the presidential run-off vote ended on June 17.
Three days earlier, the Supreme Constitutional Court, still staffed by Mubarak-era judges, had dissolved the lower house of parliament, saying rules had been broken when it was elected six months ago.
That decision, backed by the army, threatened to force a new parliamentary election, which could erode the large bloc won by the Brotherhood and its allies, and further undermine Egypt's uncertain and sometimes bloody transition to democracy.
The Brotherhood ordered its followers to stage open-ended street protests against what it called a military coup.
Yet behind the scenes, it has been negotiating with the generals to define the president's authority and salvage at least part of the dissolved parliament, in return for concessions that would safeguard some military privileges.
"NO PRESIDENT WITHOUT POWERS"
"We do not accept having a president without powers. The solution being worked out now is scaling back those restrictions so that President Mursi can deliver to the people what he promised," said Essam Haddad, an aide to the president.
Military officials were not available for comment.
The new president will be sworn in on Saturday, probably before the Constitutional Court. The Brotherhood will also stage a symbolic swearing-in ceremony in Tahrir Square.
Presidents were previously sworn in by parliament, whose building is now shuttered and under military guard.
Mursi, seeking to fulfill a promise of inclusive government, will then name six vice-presidents - a woman, a Christian and others drawn from non-Brotherhood political groups - to act as an advisory panel, said Sameh el-Essawi, another aide to Mursi.
In another break with the past, Mursi said on his Facebook page that his portrait should not hang in state offices and that his guards should not turn relatives of slain protesters away from the palace. He also promised not to hold up traffic until his motorcade had passed, as Mubarak did.
The presidential election has set the stage for a tussle between the military, which provided Egypt's rulers for six decades, and the Brotherhood, the traditional opposition - sidelining secular liberals who ignited the anti-Mubarak revolt.
Haddad said the military would keep control of its budget and internal affairs but the generals would have to keep their hands off the stalled constitutional assembly.
In its power grab, the army gave itself the right to veto articles of the constitution that the assembly will draft, angering the Brotherhood, which itself wants a big say.
"The negotiations involve loosening the grip of the generals on the constitutional assembly so that it can draft the new constitution without interference," Haddad said.
A senior Brotherhood aide said the generals had agreed to lift their veto power over articles drafted by the 100-member assembly, provided that about 10 of its Islamist members were replaced with technocrats favored by the military.
SHARING THE SPOILS
The aide, who asked not to be named, said Mursi's team and the generals had also agreed on how ministries should be divided in the cabinet, with the Brotherhood getting finance and foreign affairs, but not the defense, interior or justice portfolios.
Mursi met police commanders on Tuesday at the police academy where Mubarak's trial was held. The police come under the Interior Ministry, run by ex-police chiefs in Mubarak's day.
The Brotherhood has pledged to reform a ministry seen as a tool of political coercion and responsible for many past abuses.
Forty-one officers of the once-feared State Security agency, including its former head Hassan Abdel Rahman, were sent to a criminal court on Tuesday on charges of destroying state documents after the anti-Mubarak revolt, judicial sources said.
Abdel Rahman was among six commanders acquitted this month of complicity in the killing of protesters. Mubarak and his former interior minister were convicted of failing to prevent the killings and sentenced to life in prison.
The military, which has had its own rivalries with the security services in the past, has striven to clip the wings of an Islamist movement seen for decades as a danger to the state.
While it finally accepted that Mursi had defeated a former general in the presidential race, it has also appointed a general to run the presidency's financial affairs.
Losing candidate Ahmed Shafik, a former air force chief, left Egypt on Tuesday for a religious pilgrimage in Saudi Arabia, aides said, a day after a prosecutor referred corruption lawsuits naming him to an investigating judge.
The army moved swiftly to shut parliament after the Supreme Court's ruling that the Brotherhood's party and others should not have run candidates for the one-third of seats reserved for individuals as well as the two-thirds of seats for party lists.
Brotherhood officials said the army had agreed in talks that the election would be re-run only for the individual seats.
The Brotherhood, Egypt's oldest and most organized Islamist group, often met army generals after Mubarak's fall on February 11, 2011, in an apparent effort to manage the transition equably.
But strains swiftly emerged. The Islamists were frustrated at parliament's lack of sway over government policy, while the army grew uneasy about the Brotherhood's drive for power. (Additional reporting by Shaimaa Fayed, Tamim Elyan, Yasmine Saleh and Omar Fahmy; Editing by Edmund Blair, Alistair Lyon and Kevin Liffey)