CAIRO — President Mohammed Morsi on Sunday ordered Egypt's Islamist-dominated parliament back in session, boldly defying the military leaders who had disbanded the body just a month ago. The generals went into an emergency session within hours of the decree.

According to Egypt's official news agency, Morsi reversed the June 15 annulment of parliament by the military council, which had been ruling the country until he took office late last month, and ordered lawmakers back to work. A majority of the legislators are members of the Muslim Brotherhood's Freedom and Justice Party — to which Morsi belongs — or other Islamist groups.

Morsi also called for parliamentary elections to be held within 60 days of the approval of a new constitution, which is expected later this year.

The decree further confuses Egypt's tumultuous transition from dictatorship to democracy just one week before a planned visit to Cairo by Secretary of State Hillary Rodham Clinton. Morsi's gambit could mark the start of a prolonged game of brinkmanship between an entrenched military and a government with popular support.

The decree is considered pivotal by many observers, who have been waiting to see how the fledgling government would respond to the military council's grab of executive powers on the eve of the presidential election.

Just a week after being sworn in, Morsi answered with a direct challenge to the generals, signaling that the unfolding power struggle between the armed forces and the once-banned Muslim Brotherhood would not be a one-sided fight.

"No one is going to dismiss Morsi as a figurehead now," said Shadi Hamid, director of research at the Brookings Doha Center in Qatar. "They had to do something to fight back and gain the momentum. Assuming it wasn't pre-negotiated with the military, and it doesn't look like it was, it's certainly an aggressive first move."

The military dissolved parliament after a June 14 ruling by the Supreme Constitutional Court that one-third of the members of the lower house had been elected unlawfully.

The Brotherhood and ultraconservative Salafis controlled nearly 70 percent of the parliament, elected in January.

The ruling was a significant setback for the Brotherhood's Freedom and Justice Party, which had just under half of the seats in parliament. The judges are appointees of the Hosni Mubarak era and are widely assumed to have acted with the blessing, if not the prodding, of the generals.

The next day, in addition to dissolving the parliament, the military council took sole control of its own budget and a range of national-security prerogatives.

After Sunday's move, Morsi's opponents were quick to accuse him of overreaching.

"The Egyptian Army now is responsible before God and history and the people to protect the law and the constitution," wrote independent parliament member Muhammed Abu Hamed by Twitter.

But the president's supporters among the Islamists hailed the decree. Mohamed Saad Katatny, head of the dissolved parliament, said in a statement that the legislative body would try to hold a session as soon as possible.

"Which is constitutionally stronger, a president elected by the people's free will? Or a group who wants a military rule," party Chairman Essam el-Erian said via Twitter. "The armed forces are not responsible for legitimacy, the people are."

According to Hamid, at the Brookings Doha Center, Morsi may have created an opening for a solution that would serve both parties. Reseating the old parliament would give Morsi an invaluable legislative boost as he struggles to form his government. At the same time, ensuring relatively quick elections would give the military the new parliament it craves for the longer term.

The two sides could be dancing toward some kind of settlement, Hamid said. "The Brotherhood makes an aggressive move, the military reacts, and then they sit down and negotiate something," he said. "I think it was a good first move. At least something is going to happen now."

President Obama invited the new Egyptian leader to visit the U.S. during a United Nations meeting in September, Morsi's office said. Washington has been wary of the ascendancy of Islamists and the future of the peace agreement between Egypt and Israel.

"We have taken careful note and appreciated President Morsi's public statements about a commitment to international obligations, and we certainly attach great importance to Egypt's continuing role as a force for peace," said Deputy Secretary of State William Burns, who was in Cairo for a meeting with Morsi.

Includes information from The New York Times