Pakistanis wait on reports Musharraf met Bhutto

ISLAMABAD, July 27 (Reuters) Speculation intensified today that Pakistan's embattled President Pervez Musharraf and former premier Benazir Bhutto will form a power-sharing pact, as television channels reported they met secretly in Abu Dhabi.

Musharraf flew to the Gulf state earlier in the day, and was expected to return on Sunday, after also visiting Saudi Arabia.

Three television channels -- Geo News, Aaj TV and Dawn News -- said Bhutto had also gone there from London and the two met secretly, but state-run Pakistan Television said officials had denied the reports.

Musharraf's spokesman former general Rashid Qureshi scoffed at the reports, while Wajid Shamsul Hasan, a close aide to Bhutto in London, said he was unaware of any meeting.

Chaudhry Shujaat Hussain, the leader of the ruling Pakistan Muslim League, was more forthcoming when speaking to Aaj.

''I don't know about the meeting, but this issue was discussed when we met the president the day before yesterday and we said doors should not be closed for such contacts,'' Hussain said.

US ally Musharraf is going through the weakest period of his eight-year rule, and a Supreme Court decision last week to reinstate a chief justice he had spent four months trying to sack raised questions about his ability to secure a second five-year term with elections due by the turn of the year.

The National Assembly is scheduled to be dissolved in November, and elections should be held in December or January.

General Musharraf had wanted to secure his own re-election from the outgoing assembly, but the Supreme Court decision last week made it more likely constitutional challenges to his plan would succeed.

An alliance with two-time premier Bhutto could be his last chance, analysts say, unless he goes back on his word not to declare a state of emergency.

RUMOURS FILL VOID Musharraf has had no public engagements, and made no television appearances in the wake of the court decision, and rumours have inevitably filled the void left by his silence.

Today one newspaper, The News, ran a front-page story, citing anonymous sources, saying Musharraf's fellow generals had advised him to step down.

A day earlier two papers, Dawn and The Nation, reported Prime Minister Shaukat Aziz was under pressure to be the fall guy over the chief justice fiasco.

For days there have been expectations heads would roll, the law minister and attorney-general among them. But none have.

Instead a sense of Musharraf's isolation grew, fuelling feverish speculation the military democracy Pakistan had lived under since a 1999 coup was coming to an end.

Despite official denials of the newspaper reports the rumours refuse to die down.

''Musharraf's time is up,'' a moustachioed man in his thirties was heard telling other customers queuing for bread in an Islamabad bazaar. ''He has to face the music for what he's done.'' The uncertainty comes at a time when the nation is still traumatised by the storming of a militant stronghold at Islamabad's Red Mosque and by a spate of suicide bomb attacks.

The latest, in Islamabad today, killed at least 13 people and wounded 50.

If Musharraf were to forge a partnership with Bhutto, who controls Pakistan's most liberal political party, they could form a bulwark against religious conservatives and Islamist militancy.

Bhutto -- whose late father Zulfiqar Ali Bhutto was ousted as prime minister and hung by another general who became president -- heads the Pakistan People's Party, but has lived in self-exile since 1998 to avoid graft charges.

She has been in talks with Musharraf's emissaries for months.

Bhutto wants all cases against her dropped, and has insisted Musharraf should give up his role as army chief.

Many in her party believe she should have nothing to with a military leader on principle, but in an interview with Britain's Sunday Times last week she said she would only help him if it guaranteed that free and fair elections were held on time.

Reuters JT GC2332