Egypt's Islamist president said on Wednesday he wanted talks with the judiciary and political powers to defuse a crisis over him trying reinstate parliament in defiance of generals who dissolved it last month based on a court ruling.

Mohamed Morsi's statement appeared to be a call for a truce to prevent the crisis, less than two weeks into his presidency, from boiling over into open confrontation with the military council or the judges in his battle to wrest power.

It was the latest twist in a legal wrangle that masks a broader struggle for control of the Arab world's biggest nation that pits Morsi's Muslim Brotherhood against a military that was in charge for six decades and an establishment still filled with officials from the era of ousted President Hosni Mubarak.

"There will be consultations among all political forces, institutions and the supreme council of judicial authorities to find the best way out of this situation in order to overcome this stage together," Morsi's statement said.

The saga began when the Supreme Constitutional Court ruled on June 14, shortly before Morsi was elected, that the Islamist-led lower house was void and the then-ruling army dissolved it.

The president recalled parliament this week but was slapped down in another court ruling hours after it convened on Tuesday.

Morsi's move had risked a showdown with the army, long used to having their man in charge. Previous presidents had all been drawn from military ranks and had for most of the time since the king was ousted in 1952 repressed the 84-year-old Brotherhood.

The United States, which hands Egypt's army a $1.3 billion subsidy each year, had urged dialogue to end the row.

According to his statement, Morsi said he was 'committed to the rulings of Egyptian judges and very keen to manage state powers and prevent any confrontation'.

For many Egyptians, though, the stand-off threatens further uncertainty that has plagued the nation since Mubarak was toppled by mass protests in February 2011, sending the economy into a slump and tipping many deeper into poverty.

The Brotherhood also faces anger from liberals and others, frustrated by what they see as a power grab by Islamists, the biggest political beneficiaries of the uprising against Mubarak. They have accused Morsi of riding roughshod over the judiciary.

Presidential spokesman Yasser Ali, in a comment on the statement, said Morsi wanted to 'find a way out of the legislative vacuum caused by the dissolution of parliament'.

He said the 'problem was not bringing back this (existing) parliament' but added it did not make sense, from a constitutional point of view, to hand legislative power to the military.

Morsi, when he recalled parliament, also said new elections would be held once a constitution was in place.

BOXED IN

After parliament was dissolved, the army awarded itself the legislative role, a move that analysts said would have boxed Morsi in and hampered his policy program.

Although liberals criticised the Brotherhood for reconvening parliament, many opposed the army for taking lawmaking powers.

They could be placated, in part, with a deal to shift that role to an independent body instead of the existing parliament, declared void by the court over flaws in the way it was elected.

Leftist Hamdeen Sabahy, a losing presidential contender, had urged Mursi to respect the constitutional court ruling to help 'exit the current crisis' but also called for legislative authority to be passed from the army to a separate body.

Taking legislative powers was one way for the military to keep its hand on the tiller after handing executive office to Mursi, helping it defend its privileges and status.

But diplomats say it could also depend on a judiciary, which has a streak of anti-Islamist sentiment.

Senior Brotherhood official Mahmoud Ghozlan, speaking on Tuesday, accused the army of using the Supreme Constitutional Court against the country's first freely elected leader.

"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 said.

Although many were surprised at how swiftly Morsi acted to defy the military, few are in doubt that Islamists have a long war of attrition on their hands to push back the army and reform an establishment packed with Mubarak-era officials.

More battles lie ahead, such as a debate over the writing of a new constitution. The army, in its decree last month, gave itself the right to form a new constitution-writing body if the one picked by parliament hits an obstacle. An earlier constituent assembly was dissolved by a court.

Turkey is the closest regional example where such a struggle has taken years. The powerful army there has gradually been rolled back by the AK Party, which has Islamist roots.

Turkish Prime Minister Tayyip Erdogan said on Wednesday Egypt's military council was 'ignoring the power of the people and by not accepting the current parliament, it is a real affront to the power of the people'.

"We believe in our hearts that President Morsi will overcome this difficult and arduous period through consultation, dialogue and calm."

State media reported Morsi began a two day trip to Saudi Arabia on Wednesday. Saudi and other Gulf states have been wary of the rise of Islamists in Egypt and across the region for fear they could unsettle their own populations.