Musharraf aides resume talks on deal with Bhutto

ISLAMABAD, Sept 4 (Reuters) Representatives of Pakistan's embattled President Pervez Musharraf met former prime minister Benazir Bhutto in Dubai today in an effort to end a deadlock on a power-sharing pact, officials said.

The talks focused on holding a parliamentary election later this year and on presidential powers to dismiss a government and dissolve parliament, a spokesman for Bhutto said.

''There has been some progress on the issue of holding of free and fair elections. There has been no progress on the issue about maintaining a balance in powers between the president and the parliament,'' said Bhutto spokesman Farhatullah Babar.

''The talks will continue.'' With Musharraf's term as president and army chief coming to an end, and his opponents vowing to end his rule, Pakistan -- a nuclear-armed U.S. ally on the front line of the West's fight against al Qaeda and the Taliban -- faces months of uncertainty.

Two suicide bomb attacks in the city of Rawalpindi, where the army has its headquarters and Musharraf lives, killed 25 people today, underlining the prevailing insecurity.

Musharraf and two-time prime minister Bhutto have been discussing a deal that would shore up his position before he seeks a second term in office and enable Bhutto to return home and run for elections.

Bhutto, however, said at the weekend that the talks had stalled after fierce opposition from Musharraf's ruling-party allies. She vowed to return to Pakistan even if there was no agreement.

Musharraf, who seized power in a 1999 coup, is due to seek re-election as president in votes by national and provincial assemblies between Sept 15 and Oct 15.

''UNREALISTIC DEMANDS'' Bhutto wants Musharraf to step down as army chief, immunity from prosecution for herself and others who ruled in the late 1980s and 1990s and the lifting of a ban on a prime minister serving a third term. She also wants presidents stripped of the power to dissolve the National Assembly and dismiss governments.

In return, her party would bolster Musharraf's support base and help clear the way for him to run for re-election after he quits as army chief by backing a constitutional change waiving a bar on state servants running for office.

However, many members of Musharraf's ruling party vehemently oppose a deal that could allow their old rival, Bhutto, to return to power and sideline them.

Government officials blamed Bhutto for making ''unrealistic demands'' in the talks but insisted the government wanted to resume negotiations.

''The success of the talks depends on her attitude. It is to be seen whether they have made their demands more realistic or not. Whether there is any modification in their demands or not,'' said an official who declined to be identified.

Bhutto too faces opposition from within her own party for negotiating with the unpopular president.

Musharraf is also facing an imminent challenge from another exiled former prime minister, Nawaz Sharif, who has vowed to return on Sept. 10 and campaign to end Musharraf's rule.

Separately, lawyers, outraged when Musharraf tried to sack the chief justice in March, are due to begin an agitation campaign against him on Sept 6 while several cases against his bid for another term have been lodged in the Supreme Court.

Musharraf's party is sounding out Islamist parties for support but they appear lukewarm after Musharraf broke a promise to them to step down as army chief in 2004.

As a last resort, he could impose martial law or an emergency and postpone elections although he has ruled that out.

REUTERS PD BD1920