President Mohamed Morsi on Friday insisted Egypt was on the path to "freedom and democracy", as protesters held rival rallies over sweeping powers he assumed that further polarised the country's political forces.
"Political stability, social stability and economic stability are what I want and that is what I am working for," he told an Islamist rally outside the presidential palace.
"I have always been, and still am, and will always be, God willing, with the pulse of the people, what the people want, with clear legitimacy," he said from a podium before thousands of supporters.
Secular opponents staged a rival rally in Cairo's Tahrir Square to denounce Morsi's power grab. Some clashed with police on the outskirts of the square.
Just hours before Morsi spoke, protesters attacked Muslim Brotherhood offices in several cities, including in Alexandria on the Mediterranean.
"The situation in Alexandria is tense and security forces are eager to exercise self-restraint and maintain security and protect vital establishments," General Abdelmawgud Lutfi, head of Alexandria security, said in a statement.
In Cairo, an array of liberal and secular groups, including activists at the forefront of the protest movement that forced veteran strongman Hosni Mubarak from power early last year, marched on Tahrir Square, Cairo's iconic protest hub, to demonstrate against the "new pharaoh".
Morsi's backers led by his powerful Muslim Brotherhood gathered outside the presidential palace in north Cairo in a show of support for his decision to temporarily place his decisions above judicial oversight.
"The people support the president's decisions," the crowd chanted.
On Thursday, the president undercut a hostile judiciary that had been considering whether to scrap an Islamist-dominated panel drawing up a new constitution, stripping judges of the right to rule on the case or to challenge his decrees.
The decision effectively places the president above judicial oversight until a new constitution is ratified.
Morsi's opponents poured into Tahrir Square after the main weekly Muslim prayers, joined by leading secular politicians Mohamed ElBaradei, a former UN nuclear watchdog chief, and Amr Mussa, a former foreign minister and Arab League chief.
"Morsi is a 'temporary' dictator," read the banner headline in Friday's edition of independent daily Al-Masry Al-Youm.
Morsi's decisions "are clearly aimed at appropriating revolutionary legitimacy and using it to strengthen the position of the Muslim Brotherhood-controlled presidency," Hesham Sallam, a political analyst at Georgetown University, said.
"The decrees effectively render the presidential decisions final and not subject to the review of judicial authorities, which marks a return to Mubarak-style presidency, without even the legal cosmetics that the previous regime used to employ to justify its authoritarian ways," Sallam said.
A spokesman for the Freedom and Justice Party (FJP), headed by Morsi before his election, said the president's decree was necessary to cut short the turbulent transitional period.
"We need to move things in the right direction," said Murad Ali.
"We need stability. That's not going to happen if we go back again to allowing the judges, who have personal reasons, to dissolve the constituent assembly in order to prolong the transitional phase," he said.
Morsi also sacked prosecutor general Abdel Meguid Mahmud, whom he failed to oust last month, amid strong misgivings among the president's supporters about the failure to secure convictions of more members of the old regime.
The new prosecutor will open new investigations into the acquitted officials.
A senior FJP official said Morsi's decision was necessary to guarantee the revolution was on course.
"We could not find any legal avenue to pinpoint and prosecute those in the interior ministry who were responsible for killings," Gehad Haddad said.
Some 850 protesters were killed in clashes with security forces or Mubarak loyalists during last year's uprising.