President Mursi had recalled parliament in defiance of the military council
The highest court in Egypt has overturned a decree by President Mohammed Mursi to recall parliament.
Mr Mursi had issued the decree in defiance of a military council ruling that dissolved parliament.
Members of parliament gathered for a brief session earlier in the day before the ruling of the Supreme Constitutional Court was announced.
Thousands have gathered in Cairo's Tahrir Square to protest against the court's latest decision.
Protesters chanted slogans calling the decision "illegitimate" and denouncing the military, reports say.
The BBC's Jon Leyne in Cairo says the ruling leaves unresolved the question of who holds the power usually vested in parliament and many months of legal wrangling over what happens next could now follow.
Both the president and the military will want to show they are in charge, he says, but the struggle will probably be played out in courtrooms and the backrooms of politics, rather than on the streets.
'No other agenda'
The same court sparked the current impasse last month, when it said the parliamentary election was null and void because of flaws in the law setting it up.
The Muslim Brotherhood's Freedom and Justice party - Mr Mursi's power base - has the biggest bloc of seats in the parliament, and the current political impasse is seen by analysts as being part of a power struggle between the Supreme Council of the Armed Forces (Scaf) and the party.
The parliament session was adjourned after a brief sitting
Members of parliament met for their brief session before it was adjourned by Speaker Saad al-Katatni.
Mr Katatni said that by holding the assembly, MPs were not contradicting the dissolution ruling "but looking at a mechanism for the implementation of the ruling of the respected court. There is no other agenda today".
The MPs approved Mr Katatni's proposal that the parliament seek legal advice from a high appeals court on how to implement the supreme court's ruling on the election.
Some non-Islamist MPs boycotted the session, criticising Mr Mursi for what they said was an attack on the judiciary.
The liberal Free Egyptians party said Mr Mursi's "violation of the Supreme Court's decision" represented a "challenge to the legitimacy of his own rule", as Mr Mursi had taken his oath of office in front of the court.
The Scaf said it was confident "all state institutions" would respect the law and constitution.
The dissolution of parliament took place the day before Mr Mursi was elected in Egypt's first ever free presidential poll.
It is unclear how events will unfold as the situation - with the new president elected without a new constitution having been drafted - is unprecedented, analysts say.
At the same time as dissolving parliament, the Scaf also issued a constitutional declaration stripping the president of any authority over the military, giving itself legislative powers and the power to veto the as-yet-undrafted constitution.
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