The New Nation - Internet Edition

AFP, Islamabad

Pakistan's President Pervez Musharraf struck a last-minute deal Friday with former premier Benazir Bhuto that paves the way for power-sharing and clears a key hurdle to his smooth re-election.

Musharraf, a key US ally who seized power in a coup eight years ago, still awaits a crucial ruling by the Supreme Court -- due later Friday -- on whether Saturday's presidential vote can go ahead.

But the deal with Bhuto's opposition party takes a huge amount of pressure off Musharraf, who is controversially standing for another five-year term in office while still holding his post of army chief.

After increasingly frantic negotiations, the government and Bhuto's party said overnight they had both agreed on a national reconciliation accord which would be made public later Friday.

The deal gives an amnesty for politicians active in Pakistan between 1988 and 1999 -- effectively clearing Bhuto of the corruption charges that forced her into exile eight years ago.

It prepares the ground for Bhuto's planned homecoming on October 18 ahead of parliamentary elections due by early 2008.

The pact was announced after she met with key party members in London.

Bhuto, whose Pakistan People's Party is the country's largest, had earlier threatened to undermine's Musharraf widely-anticipated victory by pulling her MPs from parliament, after other opposition parties also resigned.

Railways Minister Sheikh Rashid, a close confidant of the president, said the deal was done. "They have agreed on the draft and it will be issued by the president tomorrow (Friday)," he told AFP.

"Benazir Bhuto has given her assent"

The cabinet was expected to give formal approval before sending the pact to Musharraf to sign, Deputy Information Minister Tariq Azeem said, adding: "We are almost there."

Musharraf's allies have a majority in the two houses of parliament and four provincial assemblies that will vote for the president, but he would benefit from Bhuto's support ahead of the general election.

He has vowed to quit as army chief by November 15 if elected.