Pakistan's Bhutto says talks with Musharraf stalled

By Kamran Haider

ISLAMABAD (Reuters) - Talks with Pakistan's military president Pervez Musharraf have "totally stalled," former prime minister Benazir Bhutto said on Wednesday, as the Supreme Court considered a last-ditch bid to block the general's re-election.

Musharraf, a major U.S. ally and leader of nuclear-armed Pakistan since he took power in a 1999 coup, looks set to win re-election on Saturday in votes by the two-chamber parliament and four provincial assemblies.

But the president is likely to need an alliance to shore up his support base, eroded by a failed attempt to sack the country's top judge in March, with his ruling coalition expected to lose its majority in a general election due by mid-January.

A possible ally, self-exiled Bhutto, has been in talks with army chief Musharraf but she told reporters in London the negotiations had stalled.

"He's not prepared to give a level playing-field. We want to see Pakistan move from dictatorship towards democracy," she said.

Bhutto, who has been demanding Musharraf quit the army before re-election, was due to meet officials of her Pakistan People's Party (PPP) to decide whether to join an opposition boycott of the presidential vote.

The PPP is not in a position to block Musharraf's re-election but would damage its credibility if it boycotted.

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.

More than 80 members of parliament from other opposition parties have resigned in protest against Musharraf standing for re-election while still army chief.

He has promised to quit the army if he is re-elected and on Tuesday he nominated former intelligence chief Ashfaq Parvez Kayani as the next army commander in the clearest sign yet he would keep his vow and hang up his uniform.

The government also moved to address one of Bhutto's main demands, saying it had decided to drop corruption charges against her and other civilian leaders. But Bhutto said the announcement was "disinformation

Bhutto, 54, plans to return to Pakistan on October 18 after eight years' absence to contest the general election. The PPP is the largest opposition party.

"ANOMALOUS AND ABSURD"

In a major boost to Musharraf last week, the Supreme Court dismissed challenges to his re-election.

But his opponents have launched new legal challenges, arguing that as army chief he is ineligible and that anyway the presidential vote should be held after general elections.

The Supreme Court began hearing the case on Wednesday and ordered Musharraf's lawyers to explain why they thought he should be elected by out-going assemblies.

Opposition lawyer Hamid Ali Khan said it was "anomalous and absurd" for out-going assemblies to elect a president for a new term: "This cycle will be going on and on permanently."

An opposition alliance led by the party of another former prime minister, Nawaz Sharif, is boycotting the presidential election in protest against Musharraf.

Bhutto said Musharraf's continued rule in uniform was fuelling extremism in Pakistan.

"The longer the military regime continues in this fashion, the more anarchic the situation becomes," she said. "I am afraid we are heading for a situation which could lead to street agitation."

Pakistan's main stock index ended nearly 1 percent higher on Wednesday. It has put on more than 5 percent this week, largely on hope that Musharraf, who has overseen strong growth and booming stocks, will win re-election.

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My take on this is the USA is flying in Pakistan's Bhutto to force Musharraf out of office. To me she is nothing but a USA lacky, but her UN and US support will ensure that she has some say, if not takes over the Government in months to come, just watch,,, Musharraf out.