CAIRO - The once-banned Muslim Brotherhood said Tuesday that it would form a political party and assist in rewriting Egypt's constitution, positioning itself to play a key role in the country's political future.

As Egyptians shifted their focus to the work that lies ahead in their transition to democracy, President Obama on Tuesday defended his handling of the upheaval in Egypt, saying he positioned the United States "on the right side of history."

The Brotherhood, an archenemy of former president Hosni Mubarak, said it would move quickly to organize a political wing - something it was prohibited from doing under the old regime.

"The Muslim Brotherhood group believes in the freedom of the formation of political parties," a leader of the movement, Mohammed al-Mursi, said in a statement.

Egypt's military rulers, who like Mubarak have traditionally seen the fundamentalist Brotherhood as a threat to the country's secular establishment, indicated that they are coming to terms with the idea of the movement becoming active in politics.

Fie ld Marshal Mohammed Tantawi, the head of the Supreme Military Council that has imposed martial law, met Tuesday with eight legal experts whom the military has asked to draft changes to the constitution. One of the scholars is Sobhi Saleh, a member of the Brotherhood.

The Supreme Military Council has said it wants the legal experts to recommend a constitutional overhaul within 10 days, so that the proposals can be submitted to a popular vote in a referendum in two months.

In Washington, President Obama said Tuesday, "Obviously there's still a lot of work to be done in Egypt . . . but what we've seen so far is positive." He noted that Egypt's Supreme Military Council has met with the opposition and reaffirmed its commitment to treaties, including a peace treaty with Israel.

"Egypt is going to require help in building democratic institutions and strengthening the economy ," Obama told a White House news conference. "So far at least, we're seeing the right signals coming out of Egypt."

Obama added: "I think history will end up recording that at every juncture . . . we were on the right side of history. What we didn't do was pretend that we could dictate the outcome in Egypt, because we can't."

He said it was important that "the United States did not become the issue" in Egypt even as the administration made clear that it supported an orderly, meaningful and rapid transition to democracy. He said the result was a largely peaceful movement with relatively little anti-American, anti-Israeli and anti-Western sentiment.

"In a complicated situation, we got it about right," Obama said.