Musharraf's rivals win Pakistan election

(Releads after pro-Musharraf party concedes defeat)
By Robert Birsel

ISLAMABAD, Feb 19 (Reuters) - Pakistani President Pervez Musharraf's opponents won a big election victory on Tuesday after voters rejected his former ruling party, raising questions about the future of the U.S. ally who has ruled since 1999.

Counting was continuing with results still awaited from almost 100 seats, but no party was expected to win a majority in the 342-seat National Assembly.

The opposition parties of assassinated former Prime Minister Benazir Bhutto and former Prime Minister Nawaz Sharif appeared to have won enough to command a majority, according to unofficial results. But there is no certainty that they will work together.

The pro-Musharraf Pakistan Muslim League was trailing a distant third, and the party's spokesman conceded defeat but kept open the possibility of joining a coalition.

"Obviously, the nation has spoken through the ballot. We couldn't convince them. They have rejected our policies and we have accepted their verdict," PML's Tariq Azim Khan told Reuters.

"For the best interest of the country, we're willing to cooperate and work with anybody. Otherwise, we're also ready to play our role in opposition."

According to unofficial results from 241 seats, Bhutto's Pakistan People's Party (PPP) had won 80 and Sharif's Pakistan Muslim League (Nawaz) had 64.

The pro-Musharraf PML trailed with 37. Small parties and independents shared the others.

Musharraf has said he would accept the results and work with whoever won to build democracy in a country that has alternated between civilian and army rule throughout its 60-year history.

DECISIVE FACTOR

Some analysts said the decisive factor in the PML's defeat was Musharraf's unpopularity and resentment over inflation, food shortages and power cuts.

Groups of happy opposition supporters celebrated in the streets in cities across the country as results trickled out.

Full unofficial results are due later on Tuesday.

Pakistan's main stock market welcomed the peaceful polls and absence of rigging complaints, and shares rose more than 3 percent. But dealers said the formation of a parliament hostile to Musharraf would make investors nervous.

Monday's vote was postponed from Jan. 8 after Bhutto was assassinated in a suicide attack on Dec. 27, which raised concern about the nuclear-armed country's stability.

As president, former army chief Musharraf did not contest the elections, aimed at completing a transition to civilian rule, but the outcome could seal his fate.

A hostile parliament could try to remove Musharraf, who took power as a general in a 1999 coup and emerged as a crucial U.S. ally in a "war on terror" that most Pakistanis think is Washington's, not theirs.

Analysts said the implications for a president whose popularity slumped after he imposed emergency rule and purged the judiciary last year were ominous.

"It's the moment of truth for the president," said Abbas Nasir, editor of the Dawn newspaper. "There will be thoughts swirling in his mind, whether he can forge a working relationship with two parties whose leadership he kept out of the country."

Bhutto spent eight years in self-exile to avoid corruption charges she denied. Sharif was exiled a year after Musharraf ousted him in 1999. Both returned late last year.

Sharif was barred from the election because of past criminal convictions he says were politically motivated.

The election was relatively peaceful after a bloody campaign and opposition fears of rampant rigging by Musharraf's supporters proved unfounded.

COALITION QUESTIONS

The PPP, led by Bhutto's widower, Asif Ali Zardari, had been expected to reap a sympathy vote, while Sharif's party is doing surprisingly well despite a mixed record as prime minister, when he clashed with the judiciary.

His defiance of old foe Musharraf and support for the judges he purged had paid off, analysts said.

A victory for Sharif, who has repeatedly called for Musharraf's removal, or the inclusion of his party in a coalition with the PPP would be disastrous for the president.

Some analysts said differences between the PPP and Sharif and his brother Shahbaz Sharif made a coalition doubtful.

A secular ethnic Pashtun nationalist party was winning in North West Frontier Province, beating Islamists who won in 2002.

Fear appeared to have kept many people from the polls. An election watchdog group put turnout at 35 percent. At least 20 people were killed in election violence, including, Zardari said, 15 PPP activists. (To read more about the Pakistan election, double-click on [nSP61741]; and visit the Reuters blog "Pakistan: Now or Never?" here) (Additional reporting by Zeeshan Haider, Faisal Aziz and Sahar Ahmed in Karachi; Editing by Alex Richardson)

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