Morsi's decrees, which were announced Thursday, saved the constitutional panel and the upper chamber from a fate similar to that of the People's Assembly because several courts looking into the legal basis of their creation were scheduled to issue verdicts to disband them.
Ayman al-Sayyad, a member of Morsi's 17-member advisory council, said the presidential aides asked the president in meetings over the weekend to negotiate a way out of the crisis and enter dialogue with all political forces to iron out differences over the nation's new constitution.
Secular and Christian politicians have withdrawn from the 100-seat panel tasked with drafting the charter to protest what they call the hijacking of the process by Morsi's Islamist allies. They fear the Islamists would produce a draft that infringes on the rights of liberals, women and the minority Christians.
The president, al-Sayyad added, would shortly take decisions that would spare the nation a "possible sea of blood." He did not elaborate.
The dispute over the decrees, the latest in the country's bumpy transition to democracy, has taken a toll on the nation's already ailing economy. Egypt's benchmark stock index dropped more than 9.5 percentage points on Sunday, the first day of trading since Morsi's announcement. It fell again Monday during early trading but recovered to close up by 2.6 percentage points.
It has also played out in urban street protests across the country, including in the capital, Cairo, and the Mediterranean port city of Alexandria.
Thousands gathered in Damanhoor for the funeral procession of 15-year-old Islam Abdel-Maksoud, who was killed Sunday when a group of anti-Morsi protesters tried to storm the local offices of the political arm of the president's fundamentalist Muslim Brotherhood, Egypt's most powerful political group.
The Health Ministry said Monday that 444 people also have been wounded nationwide, including 49 who remain hospitalized, since the clashes erupted on Friday, according to a statement carried by the official news agency MENA.
Morsi's office said in a statement that he had ordered the country's top prosecutor to investigate the teenager's death, along with that of another young man shot in Cairo last week during demonstrations to mark the anniversary of deadly protests last year that called for an end to the then-ruling military.
Up to 10,000 people marched through Cairo's Tahrir Square, the birthplace of the uprising against Mubarak, for the funeral procession of 16-year-old Gaber Salah, who succumbed to his head wounds on Sunday. Salah was wounded in clashes with police in the capital during protests against the Brotherhood earlier last week, before the decrees were issued.
Mourners marched with the Salah's body laid in a coffin wrapped in Egypt's red, white and black flag from Tahrir to a cemetery east of the city. Already images of Salah have appeared on Tahrir's walls. Underneath the mages were the words: "Your blood will spark a new revolution."
Salah was a member of April 6, one of the key right groups behind the anti-Mubarak uprising. He was also a founder of a Facebook group called "Against the Muslim Brotherhood."
Also on Monday, Human Rights Watch said that Morsi's decrees undermined the rule of law in Egypt and appeared to give him the power to issue emergency-style measures at any time for vague reasons. In Berlin, a spokesman for German Chancellor Angela Merkel said in thinly veiled criticism that the separation of powers was a fundamental principle of any democratic constitution.
Morsi, added spokesman Steffen Seibert, has a "great responsibility" to lead Egypt to a "democratically ordered political system" that rests on that principle.
Associated Press writer Maggie Michael, in Cairo, and Robert H. Reid in Berlin contributed to this report.
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