No details have yet emerged, and it may well be a headline-grabbing claim covering up an unacceptable half-measure, but this marks a significant shift in tone. If Morsy climbs down on this demand and the other main condition for talks with the mainstream opposition, led by former UN Atomic Energy head Mohammad El Baradei, it could be a very big victory for the opposition. Based upon past experience, the former looks more likely.
Simultaneously, there is news that the Muslim Brotherhood has put out a general mobilization call for its members to come to a mosque only a few kilometres from the presidential palace where tens of thousands are demonstrating against President Morsy. Some have said that they are being kitted up with helmets and more in preparation for an attack.
But the level of tension is so high in Egypt at the moment that it is hard to know what is true, what are rumours and what are outright lies.
Earlier there were statements from media outlets that the military council was meeting without President Morsy, leading to fears of an imminent coup. But the army quickly denied this was happening.
There were also reports that Mahalla, the important industrial city and birthplace of the revolutionary movement, had declared independence from the "Ikhwan" (Brotherhood) state. Likewise in Alexandria, Egypt's second city. But these seem to be stunts by activists to make a point and get media attention - and not any sort of real insurrection.
What is clear most of all at this point - besides the incredible squandering of good will by Morsy and the fantastic mobilizations and rebirth of revolutionary energy - is that the tension and polarization of Egypt are so profound that rumours are flying fast and furious. Every action, every misstep or half-heard whisper in this volatile climate is being blown up and transmitted by a thousand (or more) tweets across the country and around the world.
The pot is on the boil in Egypt and this isn't over by a long shot.