ISLAMABAD, PAKISTAN, AUG. 7 -- To understand why Benazir Bhutto's 20-month reign as the first woman to lead a predominantly Moslem modern nation ended on Monday, one place to begin is in the green forest that stretches from this capital's Foreign Office to the shores of Rawal Lake.

A financial deal endorsed by the former prime minister earlier this year to build a luxury hotel and golf course in the forest, situated at the heart of prosperous Islamabad, became a highly visible example in Pakistan of the allegations of corruption and nepotism that President Ghulam Ishaq Khan claimed was justification for his dismissal of Bhutto's government.

The 287-acre wooded plot proposed as the site for the lakeside hotel and recreation complex is estimated by local realtors to be worth at least $15 million and possibly as much as $30 million. But earlier this year, Bhutto's government moved to allot the land to a company whose initial return address was a London residence. The price -- just $930,000.

No evidence has been presented that Bhutto or any of her family members has an interest in the company that was to receive the land at such a discount. But the mystery surrounding the hotel firm fueled perceptions that her government had lost its ethical bearings.

Opposition leaders seized the political opportunity presented by the proposed transaction, charging in an April lawsuit that Bhutto's husband, Asif Ali Zardari, and her father-in-law, Hakim Ali Zardari, were behind the deal. A judge blocked the transaction just before it was due to become final. Zardari later countersued, charging defamation and citing a brief statement issued by the London firm saying that the Zardaris were not involved in the deal.

By then, however, the political damage to Bhutto had been done. Both Zardaris, but especially Bhutto's husband, were fast becoming lightning rods for widespread dissatisfaction over what was seen as accelerating and rampant public corruption across Pakistan.

In several ways, Bhutto became a victim of the political changes that her democratic government ushered in when it came to power after elections in 1988, particularly its general -- if not always wholehearted -- support for a free press.

During the previous rule of military leader Gen. Zia ul-Haq, newspaper editors were arrested and jailed if they dared print stories about government corruption, which was seen as widespread. Under Bhutto, newspapers grew more aggressive, publishing allegations of corruption against senior government officials.

The mounting allegations against the Zardaris, despite adamant denials by the former prime minister and her husband, attained credibility with the Pakistani electorate, as well as in key political power centers, such as the army and the office of the president.

There were several reasons why many Pakistanis, enamored of Bhutto two years ago, began to believe the allegations against her husband and her government.

While corruption has always been a feature of Pakistan's public and private economies, many businessmen, bankers, diplomats and international lenders agreed by last spring that the allegations of corrupt practices had reached an unprecedented level.

In that atmosphere, Bhutto made no effort to quarantine her relatives and their friends from key government positions where they wielded direct control over the banking system, loan-making, urban construction and scarce water supplies.

The former prime minister's father-in-law, for example, was chairman of the federal public accountants committee, with supervisory authority over the financial system. Asif Zardari's brother-in-law, Munawal Ali Talpur, became minister for irrigation and power in southern Sind Province, where he controlled the distribution of irrigation water to large agricultural estates in the arid region.

Aga Sadruddin, a onetime schoolmate of Asif Zardari, became minister for housing and town planning in Karachi, an influential position with ultimate authority over all land allotments and construction permits in Pakistan's biggest commercial center.

As newspaper stories and legal complaints about nepotism and questionable deals proliferated last spring, Bhutto grew more defensive, denouncing all allegations as a deliberate opposition conspiracy to destabilize her government. Despite urgings by sympathizers, she took no steps to mount a serious investigation into the complaints or to remove officials involved in apparent conflicts of interest.

Bhutto said the ultimate test of the corruption allegations should be made by the country's judiciary. A massive libel suit initiated by her husband against the country's leading newspapers this summer appeared to be the ground on which the Bhutto family had chosen to do battle with their accusers.

By responding to the corruption issue with a combative legal stance, however, Bhutto exposed herself and her government politically, allowing her opponents to charge that she had no intention of correcting the perceived abuses.

Bhutto's federal minister of state for finance, for example, helped authorize a new Islamabad stock exchange in a deal that favored exclusively a company of which the minister was formerly a director and at which a family member held a directorship, according to the findings of a Pakistani high court judge.

The judge in the case issued a sharply worded opinion accusing the finance minister of improper dealings. But Bhutto took no action against the minister, saying it was appropriate to await an appellate decision in the case by the country's Supreme Court. That decision is pending.

In another case, the mayor of Benazir Bhutto's hometown was charged with the kidnapping and extortion of a London businessman who had come to Pakistan to help build a hospital for mentally retarded children. The case generated headlines because the businessman said the offending mayor had taken him to meet with Asif Zardari prior to the abduction and that the mayor had been introduced as Zardari's "uncle."

In the kidnapping case, too, Bhutto appeared to react defensively, initially denying through government spokesmen that Zardari had ever met the kidnapped businessman and then later, after persistent press reports, saying that there might have been meetings but that her husband had no criminal intent.

The mayor has denied all criminal charges against him and is awaiting trial. He was not, however, removed from office by Bhutto, whose government said such a decision should await the mayor's acquittal or conviction.

Bhutto and her allies describe the corruption issue as a largely fabricated pretext for Pakistan's "vested interests" -- industrialists, the army and holdovers from Zia's martial-law period -- to intervene against her elected government. They say these interests had been searching tirelessly since she came to power for an excuse to remove her from office.

Perhaps the biggest question now is whether the interim government headed by former opposition leader Ghulam Mustafa Jatoi will attempt to arrest Bhutto or members of her family on corruption charges, whether because the new government finds evidence of serious violations or because it wants to cripple Bhutto's ability to return to office in elections promised for October.

Such arrests would likely polarize the volatile Pakistani electorate further, making the already difficult task of holding a fair vote in this fractious and impoverished country of 100 million potentially impossible.