Egypt's president-elect Mohamed Morsi pushed ahead on Wednesday with selecting a government, after a court delivered a blow to the ruling military by suspending its powers to arrest civilians.
Egypt's first civilian president, and its first elected leader since an uprising ousted president Hosni Mubarak in February 2011, still has to contend with the Supreme Council of the Armed Forces.
The SCAF, which took control after Mubarak resigned, will retain broad powers even after it formally transfers control to Morsi at the end of June.
Media reports said, Morsi has been holding consultations with a cross-section of Egyptian society ahead of appointing a prime minister.
The president-elect has met Field Marshal Hussein Tantawi, the head of SCAF, a delegation from Al-Azhar, the highest authority in Sunni Islam, as well as from the Coptic Christian church, whose members have voiced concern over the election of an Islamist president.
Newspapers said Morsi had likewise held talks with families of "martyrs" killed in last year's uprising to discuss their demands for renewed trials of those responsible.
On the political front, Morsi has to contend with the fact that the country's top court earlier this month ordered the Islamist-dominated parliament to be disbanded.
The military subsequently assumed legislative powers and also formed a powerful national security council that is headed by the president but dominated by generals.
The military also reserves the right to appoint a new constituent assembly should the one elected by parliament be disbanded by a court decision expected on September 1.
But the Muslim Brotherhood has insisted that only parliament can appoint the assembly.
Morsi was the Brotherhood's presidential candidate, but he resigned from the movement in order to take the top job, pledging to represent all Egyptians.
"All these details are on the table for discussion," a senior aide to Morsi said on Tuesday of the military's powers. "Nothing has been settled yet, and no decision has been taken."
Another aide said Morsi was holding talks to appoint an "independent national figure" as his premier. "Most of the cabinet will be technocrats," he added.
Egyptian media on Wednesday widely quoted a Morsi aide as saying the president-elect was "working on reaching some compromises on various issues so that all the parties are able to work together."
-- 'Mubarak health worsens after Morsi victory' --
A court ruling on Tuesday pushed back the reach of the military in a ruling welcomed by human rights groups.
Egypt's administrative court suspended a justice ministry decision that had empowered the military to arrest civilians, responding to an appeal by 17 rights groups against the controversial June 13 decree.
The head of military justice Adel al-Mursi said earlier this month that the decree was necessary after the state of emergency expired on May 31.
But the Egyptian Initiative for Personal Rights watchdog welcomed the court decision, saying the decree had given the military the right to arrest people for "resisting the rulers and insulting them."
The decree infuriated activists and protesters, who for years had campaigned to end to the state of emergency, which granted police wide powers of arrest and during the Mubarak era was often used to curb dissent.
US Secretary of State Hillary Clinton on Wednesday congratulated Morsi but said the election that brought him to power was just a step towards true democracy.
"We have heard some very positive statements so far," Clinton said, noting Morsi's pledge to honour international obligations, "which would, in our view, cover the peace treaty with Israel," signed in 1979.
Meanwhile a new report on Hosni Mubarak's health said the former strongman was slipping in and out of a coma and his morale had plunged after news of Morsi's victory.
"The former president has been greatly affected by the news of Morsi's presidential victory," said an official at a Cairo military hospital where Mubarak was transfered last week.
"According to medical reports, Mubarak's morale has worsened. He is in depression and slips in and out of coma," the official who declined to be named told AFP.
Last week Mubarak, 84, was moved from jail, where he is serving a life sentence, to a military hospital in Cairo amid uncertainty over his health, with a medical source saying he was in coma.
Mubarak was taken to a Cairo prison on June 2, after a court handed down a life sentence against him over his involvement in the deaths of protesters during the 2011 uprising that ousted him from power.