Yanukovich told ministers: "Until the constitutional court examines this issue, we will engage in no preparations for any elections."
"Given that the country is in such a tense situation, we must ensure that state institutions function ... and cut short any action, or indeed any talk, of an early election."
The prime minister's allies in parliament have asked the court to rule on the decree's legality. No ruling can be expected from the court for at least a month.
Yanukovich's supporters marched to the president's offices to confront those backing Yushchenko. Separated by a line of police, the two sides traded slogans; "Yushchenko out" competing with "We are for justice", from the president's supporters.
Yushchenko dissolved parliament saying it had become "illegitimate" after several deputies switched parties meaning it no longer reflected voters' wishes.
"Until the constitutional court examines this issue, we will engage in no preparations for any elections"
Viktor Yanukovich, Ukraine's prime minister
The president has seen his authority and popularity, once regarded as assured due to his role in the "Orange Revolution", fade over the last two and half years.
His declining fortunes have boosted Yanukovich, who has poached members from the president's party and gained new supporters across the country with his no-nonsense attitude.
Analysts say Yushchenko, who hoped to modernise Ukraine's economy and bring the country more in line with Western values, has acted to stop Yanukovich getting enough backers in parliament to directly challenge his power.
Many on the capital's streets said they were tired of political fighting and wanted no re-run of the revolution.
"I think there will be elections because if they don't happen people will just start fighting. Someone has to give way, there has to be a compromise," Gennady, a Ukranian IT specialist, said.
Addressing western ambassadors in Kiev, Yanukovich repeated a call for talks to end the standoff.
"We should extend a hand to each other," he said.
"The question of an early election should be removed from the agenda. People do not want a new election. But we are not afraid of an election. We are certain of victory."
Protesters have organised tent camps and staged rallies but they are a shadow of the vast crowds in Kiev in 2004.
Yushchenko's election victory had prompted hopes among liberals that Ukraine, a country of 47 million people lying between former imperial master Russia and the European Union, could join the EU and Nato and raise living standards.