(Image source: The New York Times )     BY ZACH TOOMBS     After claiming sweeping new powers to place himself above the courts, Egyptian President Mohamed Morsi took a step back Monday and accepted some limits to his judicial power.   Morsi’s decree last week to exempt himself and his Muslim Brotherhood-populated cabinet from court oversight prompted mass protests across the country — and gave steam to his political opposition, who said Morsi was hoping to become a modern-day Pharaoh.   Democracy in Egypt is still in its infancy — with the country less than two years removed from the resignation of longtime leader Hosni Mubarak. With that in mind, The New York Times writes:   “The agreement announced on Monday could be a watershed moment for Egypt’s new order: a triumph of respect for the rule of law and the independence of the courts...”    But Morsi did retain one key privilege. Although he withdrew his previous claim that none of his executive actions could come under judicial review, courts will still be barred from disbanding Egypt’s constitutional council — a body Morsi wants to keep in place.   Sheppard Smith of Fox News reports there was widespread fear Tuesday protests both supporting Morsi and against him would lead to violence, but...   “...now they’ve just called it off. They’ve called off tomorrow’s street demonstration to ‘lessen congestion and avoid public tension.’”   U.S. State Department officials remain somewhat hesitant to take Morsi’s step back seriously. State spokesperson Victoria Nuland did not promise Monday that the U.S. would continue sending foreign aid to Egypt under Morsi’s rule.