ISLAMABAD, (Reuters) – The party of Pakistan’s assassinated former prime minister, Benazir Bhutto, began putting together a coalition on Wednesday to topple President Pervez Musharraf after winning most seats in an election.

The PPP wants Nawaz Sharif, the prime minister Musharraf overthrew in 1999, to join the coalition along with an ethnic Pashtun party that kicked Islamist parties out of power in the North West Frontier Province where militants operate.

According to unofficial results for 261 seats, the PPP, Sharif’s party and the Awami National Party (ANP) held a shade under the two-thirds they need to change the constitution or bring Musharraf down. Independents could yet join their banner.

U.S. President George W. Bush described Monday’s vote, which was less violent and fairer than most people anticipated, as “a victory for the people of Pakistan”. A State Department spokesman urged the next government to work with Musharraf.

Musharraf is a key Muslim ally for the United States in its fight against al Qaeda and also oversaw better ties with rival India. Neighbours and allies fear nuclear-armed Pakistan is becoming more unstable.

A wave of sympathy helped Bhutto’s Pakistan People’s Party (PPP) win the most seats in the National Assembly. The allies of former army chief Musharraf, who seized power in a 1999 coup, suffered big losses.

The PPP needs coalition partners and the president’s camp is banking on persuading it to invite the pro-Musharraf Pakistan Muslim League (PML) to salvage his leadership.

Asked by the Wall Street Journal if he had contemplated resigning, Musharraf replied: “No, not yet. We have to move forward in a way that we bring about a stable democratic government to Pakistan.”

Bhutto’s widower Asif Ali Zardari, who took over as PPP leader after she was killed in December, ruled out admitting the PML but he said a southern regional rival friendly with Musharraf was welcome to join. “I want to make a government along with MQM,” Zardari told a news conference on Wednesday, referring to Muttahida Qaumi Movement, a junior partner in the PML government.

Zardari said the president’s fate would lie with parliament. “Parliament will decide which president it can work with and which president it cannot,” he said.

Sharif, whose party ran second in Monday’s poll, has made driving Musharraf from power his mission since returning from exile in November, a month after Bhutto.

Zardari and Sharif are due to meet on Thursday. Negotiations could last for days.

Analysts warned ideological differences and past bad blood could still scupper an alliance between the PPP and Sharif, in which case, the PPP’s door could re-open to Musharraf’s friends. However, if the two parties agree, Musharraf will face the choice of quitting or fighting a hostile parliament that would try to oust him on grounds he violated the constitution when he imposed emergency rule, analysts say. “My sixth sense is that he will leave,” said Ijaz Shafi Gilani, chairman of pollsters Gallup Pakistan.

Political paralysis has played havoc with management of the economy in the last six months. Pakistanis have struggled with soaring fuel prices, shortages of basic foods and gas, and worsening power cuts, while investors fear more upheaval could puncture a booming stock market. But the Karachi Stock Exchange main index has bucked a bearish trend across Asia to recover losses suffered after Bhutto’s murder.

Musharraf’s popularity disintegrated over the past year, especially after he imposed a stint of emergency rule in November, purged the judiciary and gagged the media.

Speaking during a visit to Ghana, President Bush noted Musharraf had fulfilled his promise to hold elections and stressed the U.S. need for Pakistan as an ally. “We’ve got interests in helping make sure there is no safe haven from which people can plot and plan attacks against the United States of America and Pakistan,” he said.