Bhutto gives Musharraf boost, court keeps him waiting

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ISLAMABAD, Oct 4 (Reuters) Pakistani opposition leader Benazir Bhutto said she expected to seal a ''reconciliation agreement'' with President Pervez Musharraf today, that analysts believed could lead to a power sharing within months.

Although closer to gaining a potential ally, Musharraf was still uncertain whether a presidential election will go ahead on Saturday, as the Supreme Court is still hearing objections to him standing while still army chief.

The court is expected to rule tomorrow whether to order the postponement of a vote that General Musharraf, who came to power in a coup eight years ago, looks sure to win.

The fate of Musharraf, a staunch US ally, and nuclear-armed Pakistan is being closely watched, especially by Western nations who have troops in Afghanistan and feel threatened by al Qaeda militants hiding on the Pakistani-Afghan border.

Opposition lawyers appealed to the Supreme Court to postpone the vote by members of two houses of parliament and four provincial assemblies, while it weighs the merits of their objections to Musharraf's right to run.

''It is the entire nation, 160 million people's rights which are going to be trampled so please, stay this process,'' opposition lawyer Mohammad Latif Khan Khosa told reporters after the court session was adjourned for the day.

An opposition alliance headed by former prime minister Nawaz Sharif's party is already boycotting the presidential election.

The vote would lack credibility if Bhutto were to join in the walk-out, which seems unlikely after comments she gave to journalists in London today.

Bhutto, who has lived in self exile for more than eight years, said she expected Musharraf to issue an ordinance that government officials say will erase corruption charges against her and other civilian leaders.

''We are expecting an ordinance today, yes,'' Bhutto told reporters when she arrived for a second day of talks with the leadership of her Pakistan People's Party in London.

Asked whether there had been progress, Bhutto said: ''There have been a lot of talks. We'll have an announcement later.'' The dropping of graft charges has been one of Bhutto's main demands in the talks on a power-sharing pact.

Her other main demands have been that Musharraf quit the army -- which he has promised to do after winning re-election -- and the lifting of a ban on two-time prime ministers, such as her, serving a third term.

A minister said this week the government still had ''reservations'' about the third demand.

Analysts were in no doubt that the reconciliation agreement was a precursor to future power sharing between Musharraf and Bhutto after a general election due by mid-January.

''Of course, it depends on the elections and whether the election is fair and free and whether BB wins, but obviously the agreement on this means that they will cooperate with each other,'' said Shafqat Mehmood, a former minister turned political analyst.

STOCK MARKET GAINS Bhutto, 54, plans to return to Pakistan on Oct 18 to lead her party into the general election.

Musharraf's ruling coalition is expected to fare badly in that election due to anger over rising prices, mounting insecurity, distaste for the alliance with the United States, and resentment over being ruled by a military leader for so long.

The United States, keen to see Pakistan maintain efforts to root out al Qaeda and curb Taliban raids into Afghanistan, has been quietly encouraging Musharraf and Bhutto to work together.

In a major boost to Musharraf late last week, the Supreme Court dismissed challenges to his re-election, only for fresh challenges to be mounted this week.

Pakistan's main stock index has gained nearly 6 per cent this week, largely on hope that Musharraf, who has overseen strong growth and booming stocks, would win re-election.

Musharraf today attended a conference on progress of reconstruction of northern areas devastated by a 2005 earthquake.

Monday is the second anniversary of the earthquake that killed about 73,000 people. The army emerged with credit for leading relief efforts after the country's worst-ever disaster.

REUTERS JK KN1710

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