Thousands of Egyptians rallied to support Morsi after the country's highest court Tuesday overruled his decision to recall Parliament, Voice of America reported Wednesday.
The Islamist-led assembly was dissolved last month by the nation's military leaders after the Supreme Constitutional Court found fault with the election process.
The lower chamber reconvened briefly Tuesday, defying orders by Egypt's military and judiciary.
Morsi issued a decree Sunday to reconvene lawmakers until new parliamentary elections could be held. His spokesperson, Yasser Ali, indicated elections would take place after the new constitution is drafted and approved by public referendum.
During its brief session Tuesday, the People's Assembly referred the Supreme Constitutional Court's ruling to the chamber's Constitutional and Legislative Affairs Committee. People's Assembly Speaker Saad al-Katatny said the Constitutional Declaration, which has governed Egypt since March 2011, stipulates that the Court of Cassation had the proper jurisdiction.
However, the deputy head of the Court of Cassation said lawmakers' referring the SCC's ruling to the Court of Cassation was illegal and that Morsi's decree to reinstate Parliament must be withdrawn, al-Masry al-Youm reported.
The United States is monitoring the political upheaval in Egypt and its effect on the country's transition to democracy after decades of harsh rule by President Hosni Mubarak, ousted during last year's Arab Spring, a U.S. State Department spokesman said.
"Of course we'd be worried about anything that would derail the transition, because the transition is important to us," spokesman Patrick Ventrell said during a media briefing. "And so, clearly this is an issue where there are different actors in Egypt who have a different perspective on how this needs to go forward and we want them to work it out. And so it's important to us. Clearly, anything that would derail that transition would be a worry."
Ventrell said the United States was "intensively in dialogue" with Egypt and others.
"Obviously, this is a situation where ... we urge dialogue and a concerted effort on the part of all to deal with the problems that have arisen from this particular situation," Ventrell said. "So we want them to get beyond it, and we want the transition to move forward."