Musharraf was sworn in a day after quitting as chief of the army, which brought him to power in a military coup in 1999.

He proffered an olive branch to old political rivals outraged by his declaration of Emergency rule on Nov. 3, welcoming their return from exile as good for reconciliation.

But in a sign of the anger he faces, lawyers chanting 'Go, Musharraf, Go!' clashed with police in the eastern city of Lahore. Eleven lawyers and three policemen were injured.

Musharraf's grip on power in nuclear-armed Pakistan will be less tight now he is out of uniform. He enters rocky political waters after a Parliamentary election on Jan. 8 likely to install a legislature hostile enough to contemplate impeachment.

The 64-year-old leader said the country would be stronger with him as a civilian leader and his hand-picked successor, General Ashfaq Kayani, in charge of the military.

"This is a milestone in the transition of Pakistan to a complete essence of democracy," he said in his inauguration speech.

Washington sees stability in Pakistan as vital to its campaign against al-Qaeda and the fight against the Taliban in neighbouring Afghanistan. Pakistani army action against militants has sparked a suicide bombing campaign that has killed more than 400 people since July.

EXILES RETURN

Musharraf said he welcomed the return from exile of former Prime Minister Nawaz Sharif on Sunday as well as that of another old rival, Benazir Bhutto, last month. Musharraf deposed Sharif in 1999 and forced him abroad a year later

"I personally feel this is good for the political reconciliation I have spoken of," Musharraf said.

Sharif and Bhutto, also a former Prime Minister, say they may boycott the January polls, arguing the vote will not be free and fair if held under emergency powers. Most analysts expect them to take part, though Sharif's candidacy faces legal challenges.

Musharraf, due to address the nation later on Thursday, made no mention of lifting the state of Emergency. US President George W Bush on Wednesday urged him to end Emergency rule before the elections.

Musharraf won re-election in a vote by legislators on Oct. 6. He later suspended the Constitution, declared Emergency rule and purged the Supreme Court to block Opposition legal challenges to his victory while still a serving officer.

Sharif told reporters on Wednesday Musharraf's oath of office had no legitimacy and he demanded the reinstatement of judges sacked under the Emergency.

In Lahore, about 250 lawyers in black suits tried to push their way past police who fought them back with batons outside the city's main court. Both sides hurled bricks at each other.

"We don't accept Musharraf even without his uniform. He has to go," said lawyer Malik Mohammad Arshad, his eye swollen and head bleeding after begin hit by a brick.

Lawyers have led widespread opposition to Musharraf since he tried to dismiss the chief justice in March.

Musharraf, who cited rising militancy when he imposed the Emergency, said the military had 'broken the back of the spread of terrorism' from remote tribal lands on the Afghan border towards urban population centres.

"We have to defeat terrorism, there is no choice," he said, hours after five soldiers were killed by a roadside bomb near the Afghan border.

As a military band struck up the national anthem, Musharraf snapped to salute before quickly lowering his arm, apparently remembering he was now a civilian.

Many ordinary Pakistanis say it is time he left politics.

"I don't consider him to be the President. After taking oath as President eight years ago, what has he done? Nothing," said Ali Imran, a 30-year-old government servant in Lahore.

"What we want is a democracy like India."