Pakistan awaits court ruling on vote, Bhutto pact

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ISLAMABAD, Oct 5 (Reuters) Pakistan's Supreme Court is expected to rule today on whether to suspend an election President Pervez Musharraf is set to win, just as he closes in on a power-sharing deal with former prime minister Benazir Bhutto.

An opposition legal challenge to Musharraf's participation in the presidential election while still army chief is the last hurdle he faces before tomorrow's vote by parliament and four provincial assemblies.

A court order to postpone the election while it considers the challenge would plunge the country deeper into uncertainty and raise fresh questions about Musharraf's future.

Musharraf, who became president of the nuclear-armed country after a bloodless coup eight years ago, is a staunch US ally. His fate is being closely watched, especially by Western nations which have troops in Afghanistan and feel threatened by al Qaeda militants hiding on the Pakistani-Afghan border.

It is not clear if a suspension of the vote would lead to a delay in the promulgation of a so-called National Reconciliation Ordinance that is expected to usher in a power-sharing pact between Musharraf and Bhutto.

The ordinance, a final draft of which Bhutto approved yesterday late evening, addresses one of her main demands by removing the threat of prosecution against her and other former politicians and government officials.

It will erase corruption charges against her and others paving the way for her return on October 18 from more than eight years of self-exile to lead her party in a general election due by mid-January.

But it must be formally promulgated by Musharraf before it takes effect.

''The ball is now in the government's court. We have handed over the draft to them,'' said a legal aide to Bhutto, Mohammad Latif Khan Khosa.

A government official said Musharraf was expected to promulgate the ordinance on Friday after a cabinet approval.

STOCKS UP, THEN EASE BACK Musharraf has gone a long way to meeting another of Bhutto's conditions by saying he would quit as army chief by November 15.

Bhutto said yesterday her other main political demands -- including clipping the powers of a president in favour of a prime minister -- would be addressed in a ''stage two'' of negotiations.

The two-time prime minister is also demanding the lifting of a ban on a prime minister serving a third term.

Bhutto said in London yesterday that if her terms were met, her Pakistan People's Party would not join other opposition parties seeking to undermine the credibility of the presidential election by quitting parliament.

PPP assembly members would abstain or vote for their candidate. An opposition alliance headed by former prime minister Nawaz Sharif's party will boycott the presidential election.

Musharraf's coalition is expected to fare badly in the general election because of resentment over attempts to dismiss the country's top judge, inflation, insecurity that many blame on an alliance with Washington and resentment of military rule.

The United States has quietly encouraged Musharraf and Bhutto to work together to stop Pakistan falling into the thrall of religious conservatives and becoming prey to militants.

Pakistani shares rose sharply early today on hopes of a deal between Bhutto and Musharraf but then fell back on fear the Supreme Court would postpone tomorrow's vote, dealers said.

Investors are keen to see Musharraf stay in power and continue policies that have produced growth and a strong stock market.

REUTERS SYU BST1311

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