Musharraf scotches speculation of deal with Bhutto

ISLAMABAD, Jan 13 (Reuters) Pakistan's President Pervez Musharraf has ruled out allowing exiled political leaders to return for elections, scotching speculation that former premier Benazir Bhutto could return, the state-run news agency reported.

Musharraf's comments to leaders of government parties at a dinner late yesterday followed a week of feverish speculation in the media that he was seeking a deal with Bhutto, that would allow her to return after going into self-imposed exile in 1998.

''The government was not contemplating to make any deal or seat adjustment with any political party or allow any politicians currently living abroad to enter the country,'' state-run Associated Press of Pakistan (APP) quoted him as saying.

Musharraf did not name Bhutto or Nawaz Sharif, the other former prime minister living in exile, but he has repeatedly said he would not allow either of them to run for a third term.

Promising to hold fair and free elections, Musharraf said polls will be held on schedule, although he did not give any dates. The present parliament completes its 5-year term in November, 2007.

''The parliament is poised to complete its full tenure which augurs well for the country and its quest for democracy,'' he said.

Marginalisation of Pakistan's two mainstream political parties, headed by Bhutto and Sharif, has made it difficult for Musharraf to follow through on a vision of enlightened moderation as he remains dependent on support from conservative forces.

Bhutto, 53, has confirmed meeting Musharraf's emissaries in London and Dubai several times over the past few months.

Political analysts say Musharraf is not ready to let Bhutto lead her Pakistan People's Party (PPP) into the polls or become prime minister again. There is a persistent speculation, however, that they will find some other formula to accommodate each other.

The PPP was the only opposition party to support changes to laws on rape and adultery deemed unfair to women, which Musharraf pushed through late last year in the face of fierce opposition from religious conservatives.

The chances of Musharraf mending fences with Sharif are slim. Brought to power by the military coup that ousted Sharif in 1999, General Musharraf proceeded to co-opt the rump of Sharif's Pakistan Muslim League to form a government.

REUTERS SY KP1350