The Election Commission said it had to consult political parties before announcing a new date.

The Opposition leader's assassination on Thursday triggered bloodshed across the nation and rage against President Pervez Musharraf, casting doubts on Pakistan's stability and the transition to democratic rule of the country, a front-line ally in US anti-terrorism efforts. Bhutto's Pakistan People's Party (PPP), which can expect to reap a considerable sympathy vote after Bhutto's murder, says it opposes any delay.

Former Prime Minister Nawaz Sharif, who leads the other main Opposition party, also says he is opposed to a delay although a senior official of his party said on Tuesday a brief postponement would be acceptable.

"We are ready to go ahead even on Jan. 8 but if there is genuine reason naturally it has to be taken into consideration," Iqbal Jhagra, the party's vice president, said.

Election Commission official Kanwar Dilshad said on Tuesday that 'in principle' the election was being delayed and a new date would be announced on Wednesday.

VOTER ROLLS BURNT

The commission has said many of its offices in Sindh, Bhutto's home province, were burnt in rioting after her murder, and election material including voter rolls reduced to ashes.

"We will inform the political parties about the situation in Sindh where our 13 offices were burnt. We will inform them about the ground realities and then we will fix a date in consultation with them," Dilshad said.

Analysts expect the vote to be postponed to late February but also say a delay could lead to violence.

The pro-Musharraf Pakistan Muslim League (Q) has said it favours a delay because of the security situation. Opponents say a delay would work to Musharraf's advantage.

"There are no grounds whatsoever for delaying the elections," said Raza Rabbani, deputy secretary general of the PPP.

"It is being done only on at the behest of the PML (Q) as they are seeing their defeat," he said.

Pakistan is gripped by fears of capital flight if security worsens. Shares on Tuesday were down three percent in early trade.

US State Department deputy spokesman Tom Casey said that, if the election could be held in safety 'then that's probably what should happen'.

VIOLENCE FEARS

"The key here is that there be a date certain for elections in Pakistan. We would certainly have concerns about some sort of indefinite postponement," Casey said on Monday. "Looking at the law and order situation, which is quite (difficult), I don't know if an election could be held or not," Nadeem Saeed, who works for a multinational company, told Reuters as he walked to work in Karachi on Tuesday.

However, he said: "If elections are not held on Jan. 8, then another rally of violence will take place."

Bhutto, relatively liberal by Pakistan's standards and an opponent of Islamic militancy, ended her self-imposed exile in October. Hours after arriving home she narrowly escaped a suicide blast that struck her motorcade, killing about 140 people.

Her death wrecked US hopes of a power-sharing deal between her and Musharraf, who took power in a military coup in 1999 but left the army in November to become a civilian President.

The PPP has suggested Musharraf's government is trying to cover up the truth about Bhutto's killing and bears at least some of the responsibility.

"I think whoever has to gain from her death and definitely the sitting government has to gain, they should be held responsible," Bhutto's widower Zardari told CNN.