Some media reported that Morsi's decision caused a political earthquake.
CAIRO: Egypt's top court on Monday rejected a decree by President Mohamed Morsi to reinstate the parliament it ruled invalid, setting him on a collision course with the judiciary and the military which enforced the ruling.
"All the rulings and decisions of the Supreme Constitutional Court are final and not subject to appeal... and are binding for all state institutions," the court said in a statement.
This came after Morsi decided to order back the Islamist-led lower house of parliament a month after the court found certain articles in the law on parliamentary elections to be invalid, annulling the house.
The powerful Supreme Council of the Armed Forces (SCAF), which was running the country after president Hosni Mubarak was ousted in a popular uprising last year, had dissolved parliament based on the ruling.
The court's move could spark a confrontation between Morsi, who stepped down from the Muslim Brotherhood when he was sworn in last month, and the SCAF as well as the judiciary.
But the presidency insisted the decree neither contradicts nor contravenes the ruling by the constitutional court.
The ruling does not need to be implemented immediately according to precedent, said presidential spokesman Yasser Ali, arguing that Morsi's decision takes into account the higher interest of the state and the people.
Morsi's decree also stipulates the organisation of new parliamentary elections two months after the approval by referendum of Egypt's new constitution and the adoption of a new law regulating parliament.
The confrontation prompted the United States to urge Egypt to respect democratic principles.
"Developments are unfolding quickly and we are monitoring them and in touch with Egypt's leaders," said National Security Council spokesman Tommy Vietor.
"Ultimately, though, these issues are for Egyptians to decide in a manner that respects democratic principles, is transparent, and protects the rights of all Egyptians," he said.
The constitutional court stressed that it was not a part of any political conflict... but the limit of its sacred duty is the protection of the texts of the constitution.
Its statement came hours after parliament speaker Saad al-Katatni invited the lower house to convene at 2:00 pm (1200 GMT) on Tuesday, in line with the presidential decision.
It was not clear how the court's ruling would be enforced.
The Muslim Brotherhood, from which Morsi stepped down when he became president, said it will participate (Tuesday) in a million-man march in support of the president's decision and reinstating parliament.
Morsi's decision caused a political earthquake, some media reported on Monday, sparking a flurry of meetings including by the SCAF and the constitutional court.
"Morsi says to SCAF: Checkmate," read the headline of the independent daily Al-Watan, as Al-Tahrir, another daily, declared "Morsi defeats SCAF."
His move also angered some secular parties, which had slammed the Muslim Brotherhood's monopolisation of power since the start of the uprising.
"In any decent and democratic country, a president cannot disrespect the judiciary," said Rifaat al-Said, head of the leftist Al-Tagammu party.
"Whether Morsi likes it or not, he must respect the judiciary's decisions," he told state television.
Said said a march to parliament would be organised later on Monday, and stressed that several parties will boycott parliament's sessions.
But some such as former presidential candidate Abdel Moneim Abul Fotouh found in Morsi's decision a subtle way out of that confrontation.
"Respect for the popular will by restoring the elected parliament and respect for the judiciary by holding parliamentary elections is the way out of this crisis," Abul Fotouh wrote on Twitter.
The military dissolved parliament last month after Egypt's top court made its controversial ruling, a day before the second round of the presidential poll that saw Morsi become Egypt's first democratically elected head of state.
The Supreme Constitutional Court had said certain articles in the law governing parliamentary elections were invalid, annulling the Islamist-led house.
It also ruled as unconstitutional the political isolation law, which sought to bar senior members of Mubarak's regime and top members of his now-dissolved party from running for public office for 10 years.
Morsi beat Mubarak's last premier Ahmed Shafiq in the presidential election.
The SCAF issued a constitutional declaration granting the military sweeping powers, and in the absence of a parliament -- in which nearly half of seats were won by the Brotherhood and another quarter by hardline Salafists -- it assumed legislative power.
SCAF's document, which rendered the presidency toothless, caused outrage among those calling for the military to return to their barracks.
Instead of being sworn in before parliament, the 60-year-old Morsi took the oath on June 30 before the constitutional court.