Pakistan President General Pervez Musharraf swore in a caretaker administration today and declared he had "introduced the essence of democracy in Pakistan".
The move came after former prime minister Benazir Bhutto had her house arrest lifted only hours before the arrival of a senior US envoy who is expected to urge the country's military leader to end emergency rule.
A Bhutto supporter gestures defiantly as he is arrested in Pakistan yesterday
Despite a call by Ms Bhutto on fellow opposition leaders to join her in forming an alliance to govern until the election, Gen Pervez Musharraf has given no sign he will hand over power. He has named his own interim prime minister and announced the caretaker cabinet to oversee parliamentary elections promised by January 9th.
Shortly after Ms Bhutto's release, President Musharraf swore in an ally as caretaker prime minister - Senate Chairman Mohammadmian Soomro - and a 24-member cabinet packed with Musharraf loyalists to oversee the election.
The opposition rejected the move as part to Gen Musharraf's plan to retain power and said the election would not be fair, especially under a state of emergency.
Political unrest deepened yesterday as one of the country's main Islamist parties called its first protests for today against the state of emergency, adding the voice of factions opposed to Gen Musharraf's alliance with the US to the recent protests by lawyers, students and secular parties against military rule.
Also yesterday, two children and an adult were killed during a gunbattle between police and protesters in the southern city of Karachi - the first deaths during demonstrations since Musharraf suspended the constitution November 3rd. Protests were reported in other cities and more party activists were arrested.
Ms Bhutto outlined her plan for opposition factions to form a national unity interim government that could supplant Gen Musharraf's administration, an idea that was quickly supported by her longtime political rival, Nawaz Sharif.
However, Mr Sharif said they weren't in a position to form an acting government unless President Musharraf was removed from office. Ms Bhutto indicated a need for a voluntary transfer of power, saying she shared Washington's concern about a power vacuum should the general be ousted.
Mr Sharif, who like Ms Bhutto is a former prime minister, said the opposition's priority should be reinstatement of Supreme Court judges removed by Gen Musharraf. Independent-minded judges blocked some of his moves this year, and many people suspect Gen Musharraf feared the court would overturn his re-election as president last month by legislators.
The deteriorating situation greatly worries the Bush administration, which has seen Gen Musharraf as a key ally in the fight against Taliban and al-Qaeda-linked extremists who have been gaining strength along Pakistan's border with Afghanistan.
AP