By Simon Cameron-Moore
ISLAMABAD (Reuters) - The rout of his allies in Pakistan'sparliamentary election could herald the end for PresidentPervez Musharraf, one of Washington's most important Muslimallies in its fight against al Qaeda, analysts say.
The United States on Tuesday welcomed the vote as "a steptoward the full restoration of democracy" but urged the nextgovernment in the nuclear-armed Asian country to work withMusharraf, who seized power in a 1999 military coup.
A wave of sympathy helped the Pakistan People's Party (PPP)of assassinated former Prime Minister Benazir Bhutto to emergeas the largest party in the National Assembly.
But the PPP needs coalition partners and the president'scamp is banking on persuading it to invite the pro-MusharrafPakistan Muslim League (PML) to salvage his leadership.
Bhutto's widower Asif Ali Zardari, who took over as PPPleader after she was killed in December, appeared to take thatlifeline away by saying his party would not invite anyone fromthe PML into the broad-based coalition it planned to form.
The PPP wants Nawaz Sharif, the prime minister Musharrafoverthrew in 1999, to join the coalition along with an ethnicPashtun party that kicked Islamist parties out of power in theNorth West Frontier Province where militants operate.
Sharif, whose party ran a close second in Monday's poll,has made driving Musharraf from power his mission sincereturning from exile in Saudi Arabia in November, a month afterBhutto.
Intense negotiations are widely expected over the comingdays, and Zardari and Sharif are due to meet on Thursday. Ifthey do not reach agreement, the PPP's door could re-open toMusharraf's supporters.
But Sharif joining forces with the PPP would leaveMusharraf with two choices that would mean his demise, saidanalysts.
THE CHOICES
They said Musharraf could either quit of his own volitionor drag out political upheavals with a hostile parliament thatwould try to oust him on grounds he violated the constitutionby imposing emergency rule last November for a few weeks.
"He has the graceful option and the confrontationaloption," said Ijaz Shafi Gilani, chairman of pollsters GallupPakistan.
In Washington, U.S. State Department spokesman Tom Caseysaid: "We certainly would hope that whoever becomes primeminister and whoever winds up in charge of the new governmentwould be able to work with (Musharraf)."
On board U.S. President George W. Bush's Air Force One on aflight to Ghana, White House spokeswoman Dana Perino toldreporters: "We hope that they continue to work with us aspartners in counter-terrorism.
"The threat from extremists is just as grave and veryimmediate for the people of Pakistan as evidenced by theviolence there recently."
Musharraf has relied on three sources of support -- thearmy, Washington and politicians who deserted old partyleaders.
But on top of the PML's election battering, Musharraf quitas army chief last November and U.S. support has been stretchedthin due to what many of his critics saw as his autocraticbehaviour over the past year.
The critics say the army's morale has been damaged byMusharraf's efforts to stay in power despite deep unpopularity.
Political paralysis has played havoc with management of theeconomy in the last six months, and Pakistanis have had tostruggle with soaring fuel prices, shortages of basicfoodstuffs and gas, and worsening power cuts.
But investors have appeared impervious to the problems. TheKarachi stock market gained three percent on Tuesday,registering relief the vote had passed off with less violenceand less rigging than feared.
(Editing by Ralph Gowling)
(To read more about the Pakistan election double click on;and visit the Reuters blog "Pakistan: Now or Never?" athttp://blogs.reuters.com/pakistan/)
