The decision to hold fresh polls has been taken in principle in the light of a report submitted by a ministerial team, comprising foreign minister Sartaj Aziz and education minister Syed Ghous Ali Shah, the daily Dawn said. It quoted unnamed sources as saying that the timing of elections and party strategy was likely to be finalised at a meeting of the central committee of the ruling Pakistan Muslim League (PML) on Tuesday.

The PML meeting, to be chaired by Prime Minister Nawaz Sharif, will be held at the northwestern hill resort of Abbotabad.

No official comments were immediately available.

Meanwhile, the provincial capital Karachi erupted in violence as activists of a minority ethnic party and police clashed, said eyewitnesses and police sources.

Scores of shopswere set on fire and smouldering cars blocked roads as security troops fired tear gas shells to disperse demonstrators protesting the arrest of at least 200 of their activists, along with five top leaders. There were no immediate report of injuries.

Supporters of the smaller Haqiqi faction of the former Mohajir Qaumi Movement (MQM) hurled stones at police, burned tires, blocked roads and fired automatic weapons in the congested eastern Landhi neighbourhood to protest a police raid on a meeting at their party headquarters.

Demonstrations in Karachi today involved Haqiqi workers who accused the government of arresting 200 of its supporters.

The government also arrested senior Haqiqi leaders, including party vice-chairman Badar Iqbal and party officials Younus Khan and Kamran Rizvi, they said.

Sharif is to hold a high level meeting in Karachi tomorrow to review the law and order situation.

The premier on Friday suspended the provincial government and imposed direct federal rule on Sindh in a bid tocurb ``lawlessness and terrorism'' in the provincial capital Karachi, where violence this year has claimed about 1,000 lives. Under the constitution, the government can suspend a regional Assembly for 90 days. It can extend federal rule for another three months if considered necessary, experts said.

The ruling coalition split last week after the MQM withdrew its support to Sharif, who had accused the party of involvement in the October 17 murder of former provincial governor Hakim Saeed.

The charges were denied by MQM, which termed the government's move a conspiracy to harm its influence in rural Sindh.

The government Saturday launched a crackdown against terrorists and criminals in Karachi and MQM claimed scores of its supporters and activists had been arrested.