It was just announced that the December 15 referendum on the controversial new Islamic Constitution will go forward as planned reports Ahram Online:

Islamic scholar Selim El-Awa, a member of Egypt’s National Dialogue, announced that president Mohamed Morsi had called off the controversial constitutional declaration he issued last month.

El-Awa, who was among more than 40 national figures attending a lengthy meeting with Morsi on Saturday in a bid to ease growing tensions between the president and opposition, revealed that a new constitutional declaration will replace the 22 November decree, which sparked deadly clashes in front of the presidential palace the past few days.

The announcement heeds one of two key demands of the anti-Morsi protesters.

However, El-Awa said the referendum on the new draft constitution, slated for 15 December, will go ahead as scheduled, defying the demonstrators who believe the proposed national chart does not fulfill the aspirations of Egyptians.

The withdrawal of the declaration, which put Morsi above the judiciary, will placate Western headline writers, but doesn’t change the big prize, which is the constitution.  That referendum will go forward, with Morsi suggesting some form of martial law might be declared to ensure the vote takes place, via WaPo:

It remains unclear whether the new moves will be enough to ease a political crisis that had degenerated in recent days into unprecedented scenes of division, with Morsi’s Islamist backers and his secular and liberal opponents hurling rocks and Molotov cocktails and beating each other bloody with sticks.

Tanks were deployed to the streets around the palace where those clashes took place.

Earlier Saturday, as the national dialogue began, Morsi appeared to be preparing to grant the military broad powers to arrest civilians and keep public order until a new constitution is approved and parliamentary elections held, according to a report Saturday in the state-run newspaper al-Ahram. The move was approved by Morsi’s cabinet, the newspaper said, and would require him to issue a new decree for it to take effect, which Morsi had not done by late Saturday night.

The new Constitution will change Egypt into an Islamist state, via Times of Israel:

One of Egypt’s most prominent ultraconservative Muslim clerics had high praise for the country’s draft constitution. Speaking to fellow clerics, he said this was the charter they had long wanted, ensuring that laws and rights would be strictly subordinated to Islamic law.

“This constitution has more complete restraints on rights than ever existed before in any Egyptian constitution,” Sheik Yasser Borhami assured the clerics. “This will not be a democracy that can allow what God forbids or forbid what God allows.”

The draft constitution that is now at the center of worsening political turmoil would empower Islamists to carry out the most widespread and strictest implementation of Islamic law that modern Egypt has seen. That authority rests on the three articles that explicitly mention Shariah, as well as obscure legal language buried in a number of other articles that few noticed during the charter’s drafting but that Islamists insisted on including.

According to both supporters and opponents of the draft, the charter not only makes Muslim clerics the arbiters for many civil rights, it also could give a constitutional basis for citizens to set up Saudi-style “religious police” to monitor morals and enforce segregation of the sexes, imposition of Islamic dress codes and even harsh punishments for adultery and theft — regardless of what laws on the books say.

The Islamist clerics who run Morsi were not going to let Morsi’s judicial decree get in the way (via Instapundit):

I expected the worst as I watched on television one day the Supreme Guide of the Muslim Brotherhood Mohammed Badie, who was not elected by anyone, walking in front of President Mohammed Mursi.

The president is the first Egyptian, and must walk in front of everyone. But it is clear that Dr. Mursi continues to consider himself a member of the Guidance Bureau of the group, before being the president of Egypt. Therefore, he is attempting to impose on half of the Egyptians who did not vote for him his religious convictions, rather than a national policy that would accommodate all Egyptians.

The prize is just a week away.