Musharraf Agrees to Resign as Army Chief

"It's a good transitional situation," Markey said. "But it's not a stable, workable setup in the long run. There's not a lot of love lost between the two of them."

Indeed, Bhutto seems to revel in casting herself as everything Musharraf is not, and vice versa. Bhutto, who served twice as prime minister in the 1980s and 1990s, has spent much of the past eight years decrying Musharraf as "a military dictator." Musharraf, who came to power in a 1999 military-led coup, has accused Bhutto of rampant corruption and has dismissed her tenure as "sham democracy."

Still, for the moment at least, the two need each other.

If the deal goes through, it would involve a dizzying array of concessions on both sides that would require numerous changes to Pakistani law, including constitutional amendments.

For Musharraf, the deal means he would get to serve another five years as president if elected for a new term by the parliament and provincial assemblies. Bhutto said it remained unclear Wednesday whether that endorsement would come from the current legislatures, which expire this fall, or from new ones that are expected to be elected this winter.

Either way, officials indicated, Bhutto will instruct her party not to try to block Musharraf's plans, provided he runs as a civilian. The election could take place as early as mid-September, meaning Musharraf would be stepping down from his army role in the next few weeks.

Musharraf needs Bhutto's popularity to give his election credibility, said Ahmed, the federal minister.

For Bhutto, the agreement would allow her to return to Pakistan and stand for election to the parliament. If her party, the center-left Pakistan People's Party, won the most seats, as projected by opinion polls, she would be in line to serve as prime minister.

Bhutto is also expected to win the dismissal of various corruption charges against her and other government officials stemming from the late 1980s and 1990s.

Although the two sides are close together on terms, various wild cards remain.

Among them is the impending return of Sharif, who has vowed not to compromise with Musharraf and has chastised Bhutto for doing so. The Supreme Court this month cleared the way for Sharif to return, despite an agreement he signed in 2000 to spend 10 years in exile in Saudi Arabia rather than serve a life sentence imposed in Pakistan.

Another unknown is how the Supreme Court would react to the deal between Musharraf and Bhutto, and whether it would strike down any of the legal changes called for in the agreement.

If the plan succeeds, Musharraf and Bhutto face the prospect of governing together. Bhutto said she anticipates Musharraf continuing to direct the nation's foreign policy but said she would expect to take control of domestic matters.

In Pakistan, however, those lines are rarely clear-cut. For instance, Bhutto said she would take a different approach in battling militancy in Pakistan, a domestic issue with vast international implications.

Musharraf's government has struck a series of cease-fire agreements with Taliban fighters in the tribal areas, but Bhutto said that approach would not continue under her leadership.

"A line in the sand has to be drawn," she said. "The past six or seven years of trying to placate them have only emboldened them."