Opposition parties had been pressing for cancellation of the decree and also postponement of the referendum. The country was plunged into a political crisis on Nov 22 when Morsi put himself beyond judicial review by issuing the decree.
Condeming the move, thousands of Egyptians took to the streets while the opposition accused the president of acting like a dictator. Anti-Morsi activists thronged the Tahrir Square, demanding his resignation.
Last week, seven persons were killed and around 640 injured in violent clashes between the protesters and soldiers. Finally the military asked both the president and the opposition to resolve their differences through discussions.
"The Armed Forces watches with sorrow and concern the developments of the current circumstances, and the status of the divisions and unfortunate events threatening the pillars of the Egyptian state and the national security," the military said.
"We support national dialogue, and serious and sincere democratic process on the debatable issues and points, to reach consensus. The dialogue approach is the best way and the only access to consensus in the interest of the nation and citizens. The opposite would get us into a dark tunnel with disastrous consequences, which we will not allow," it added.
Accordingly, Morsi met representatives of 13 parties yesterday. However, opposition leaders boycotted the meeting. Afterwards Morsi's advisor Selim al-Awa told newspersons here that the referendum will be held on Dec 15. "The constitutional decree is annulled from this moment," he said.
Reading out a joint statement of the 13 parties, Khairat al-Shater of the Muslim Brotherhood said that they "insist that the referendum on the constitution take place on the scheduled date (Dec 15), with no modification or delay."
Besides the Muslim Brotherhood's political wing, the statement was signed by the Al-Nour party as well as the Freedom and Justice Party among others. The opposition later made it clear that they are not willing to hold talks with Morsi till he postpones the referendum.