CAIRO (AP) — As Mohammed Morsi moved Monday into the presidential office last occupied by Hosni Mubarak, the contours emerged Monday of a backroom deal that led Egypt's powerful military council to bless the Islamist as the country's first freely elected head of state.
The complex web of issues still to be hammered out range from what to do about the dissolved parliament and the drafting of a new constitution to who will head the Cabinet and hold the key defense and foreign ministries.
Still, the country breathed a sigh of relief that at least the question of who won the presidential runoff had been resolved on Sunday when Egypt's election commission officially recognized the 60-year-old U.S.-trained engineer as the first civilian and the first Islamist to hold the post.
People returned to work a day after a panic sent many home early for fear that violence might erupt when the winner was announced. Traffic was flowing again through Cairo's Tahrir Square, the birthplace of last year's uprising, which had been blocked by Morsi supporters protesting against the military's power grab.
Newspapers were brimming with upbeat headlines, after a week of rumors and scaremongering. "Morsi president on orders from the people: The revolution reaches the presidential palace," said a banner headline in independent daily Al-Shorouk.
Still, Morsi's recognition as president-elect does not resolve the larger standoff between the generals and his Muslim Brotherhood over the institutions of government.
After the generals stripped the presidency of most of its major powers in recent weeks, Morsi takes office without a clear picture of his authorities or what he can do to resolve Egypt's most pressing issues, including restoring stability and security, and improving the struggling economy.
Morsi narrowly defeated Ahmed Shafiq, Mubarak's last prime minister and a former air force general, in a race that deeply polarized the nation and threatened to unleash violent protests. Now he faces a daunting struggle for power with the still-dominant military rulers who took over after Mubarak's ouster in the uprising.
State TV showed footage of Morsi meeting Monday with the ruling military council headed by Field Marshal Hussein Tantawi, who was Mubarak's defense minister for 20 years. The TV quoted Tantawi as saying the military will "stand by the elected, legitimate president and will cooperate with him for the stability of the country."
Morsi also met with the military-backed Prime Minister Kamal el-Ganzouri, who resigned Monday and was asked to head a caretaker government until Morsi nominates a new one.
Lawmakers and mediators were tightlipped about the details of the negotiations, although they acknowledged that a few round of talks with the generals took place last week and are ongoing — a sign that much remains undone.
"There is a political settlement initiative that takes everyone's concerns into account," said Muslim Brotherhood member and lawmaker Sobhi Saleh.
But deep mistrust remains. The ruling generals have stacked their side with a maze of legal tools that strengthen their negotiating position, while the Brotherhood must tread softly: The talks can easily blow up into wider social discontent if the Islamist group appears to be looking out only for its own partisan interests and trying to entrench its grip on power.
Emad Abdel-Ghaffour, the head of the ultraconservative Islamist party Al-Nour, said in the week between the June 16-17 presidential runoff and the announcement of the winner on Sunday, many politicians tried to mediate between the Islamists and the generals.
"There was an easing (of tension)" when the elections results came through, he said. But discussions are still under way to clarify the authorities of the president and the military. And one of the immediate sticking points is the dissolution of the Muslim Brotherhood-dominated parliament by a court order, days before the presidential runoff.
As polls closed on June 17, the ruling Supreme Council of the Armed Forces announced constitutional amendments that shocked the Brotherhood and many other political activists who took part in the uprising 16 months ago.
The ruling generals gave themselves sweeping powers that undercut the authority of the president. That followed a government decision that granted military police broad powers to detain civilians. The military council, which promised to transfer power to an elected leader by July 1, said the moves were designed to fill a power vacuum and ensure that the president doesn't monopolize decision-making until a new constitution is drafted.
Two days before the runoff, a court packed with judged appointed by the Mubarak regime also dissolved the country's first freely elected parliament, which was dominated by Islamists. The military council followed by declaring it was now in charge of legislating.
Closed-door meetings between Brotherhood members and the ruling generals as well as mediation from different groups, including pro-reform leader Mohammed ElBaradei, aimed at easing the crisis and defusing a political stalemate.
Brotherhood members said the election results, delayed for four days, were held up by authorities as a bargaining chip to reassure the generals in the face of mounting Brotherhood opposition to the military's tightening grip and the group's rise to power.
Former presidents were sworn in by parliament. But with the parliament dissolved, it was not clear where Morsi will be sworn in. Authorities say he could be sworn before the country's highest court, but his supporters are pressing for parliament to be reinstated, arguing that the court decision only disputed a third of the house's seats.
Abdel-Ghaffour said discussions with the generals centered on the Brotherhood's argument that only the disputed third of parliament be dissolved because it was that portion that was elected based on articles deemed unconstitutional. Independent and party members competed for a third of the 498-seat house, which the court said violated rules of equality between candidates.
Brotherhood lawyers say another court, Egypt's highest administrative court, is likely to back their claim.
"This is likely to happen," said Abdel-Ghaffour, whose Islamist party won 25 percent of the dissolved parliament seats in addition to the Brotherhood's nearly 50 percent. "A third of parliament can be dissolved and re-elected in 75 days."
The speaker of the dissolved parliament met with the No. 2 general on the military council, Chief of Staff Gen. Sami Anan, twice since the court decision on June 14.
Abdel-Ghaffour also said talks centered on reassurances the generals were seeking regarding the Brotherhood's control of the new government, including demands that Morsi appoint a prime minister who is a technocrat from outside the Brotherhood.
The stickier issue of drafting the constitution was also raised as well as fears over who controls the key foreign and defense ministries. The generals' new declaration ensures the military appoint the defense minister and control all issues regarding military personnel.
Before parliament was dissolved, a panel appointed by the legislature was supposed to be in charge of drafting the new constitution which would determine the role of Islam in legislation, Egypt's future political system and the role of the military.
In the recent power grab, the ruling generals gave themselves, the prime minister, judges or a fifth of the panel members the right to veto details of the constitution that will be drafted, curbing the powers of Islamists to control the process. The parliament-formed panel is expected to meet Tuesday, and Abdel-Ghaffour said it is expected to continue its work.
"Both sides want reassurances," Abdel-Ghaffour said. "But there is a will for the caravan to keep moving," he said, using an Arabic expression.
Brotherhood officials said protests will continue until the military responds to their demands.
Saad Emara, another Brotherhood lawmaker, said allowing the military to determine these posts will further erode the authority of the president. "They are hardening their position," he said. "Our presence in the square as protesters is the best negotiating card."
Thousands of Morsi supporters, backed by some liberal and secular youth groups who drove the uprising, vowed to press on with their protest in Tahrir Square to pressure the ruling generals to rescind their decrees and reinstate parliament. Tens of thousands spent the night in Tahrir in joyous celebration of Morsi's win. After thinning in the morning, the crowd built up again by Monday evening.
Islam Lotfi, a former Brotherhood member who has formed a new party and was part of a Brotherhood-led front to protest against the military power grab, said there are efforts to create a representative committee to negotiate with the generals over demands to abrogate the recent decisions and "truly transfer powers to civilians."
Ayman Nour, a liberal former lawmaker who is currently on the panel to draft the constitution, sounded a more cautious note.
"The situation is very ambiguous ... and no one wants a clash," said Nour. "Every coming step can create a crisis, and if it is not managed smartly, professionally and in a non-partisan way, it will only get more tangled."