ISLAMABAD, Pakistan, (AP)- President Gen. Pervez Musharraf and his aides worked to finalize a caretaker government Thursday, while his two opposition rivals opened talks on forming an alliance against him.

A U.S. diplomat was allowed to cross the barricades and heavy police cordon surrounding the house in the eastern city of Lahore where opposition leader Benazir Bhutto has been confined since Tuesday.

Bryan Hunt, the U.S. consul general in Lahore, emerged an hour later and said he had told Bhutto of Washington’s wish for Musharraf to lift the emergency, quit as army chief and free opposition politicians and the media.

“We need to move as rapidly as possible to have free and fair elections held on time,” Hunt said.

A White House spokeswoman said Wednesday that Musharraf should relent “immediately.” Deputy Secretary of State John Negroponte is due in Islamabad on Friday.

In an Associated Press interview Wednesday, Musharraf said he expects to quit as chief of the army by the end of November, heralding a return to civilian rule. However, he rejected Western pressure to quickly end the emergency.

Nov. 15 marks the end of the current Parliament’s five-year term. Musharraf’s concurrent presidential mandate also expires Thursday, though he has extended it by calling the state of emergency that has cast Pakistan into a deep political crisis.

A caretaker administration will be charged with guiding Pakistan toward parliamentary elections to be held by Jan. 9. The vote is supposed to complete the restoration of democratic rule in Pakistan, eight years after Musharraf seized power in a bloodless coup.

However, both opposition parties and Western governments say that the vote cannot be considered free and fair unless the general quickly lifts the emergency, which many in Pakistan are equating with martial law.

Musharraf seized extraordinary powers on Nov. 3 and used them to detain thousands of opposition and human rights activists, purge the senior judiciary and black out independent TV news channels.

The United States still counts Musharraf as a stalwart ally in its war on terror. But it wants him to share power with other moderates, such as Bhutto, to harness more political support for Pakistan’s struggle against Islamic extremists while also ending military rule.

Musharraf says the main purpose of the emergency is to protect the effort against extremism from interfering judges and political turbulence.

He said rising Islamic militancy required him to stay in control of the troubled nation though left the door open for future cooperation with Bhutto if she wins the January vote.

“Emergency is in fact meant to make sure that elections are held in a peaceful manner,” Musharraf said. “I take decisions in Pakistan’s interest and I don’t take ultimatums from anyone.”

The crackdown on dissent has triggered a rapid downward spiral in his relations with Bhutto, a pro-Western secularist like himself but also a fierce political competitor.

Bhutto called Tuesday for Musharraf to leave power and joined other opposition parties in threatening to boycott the election. On Wednesday, she telephoned Nawaz Sharif, whose government was ousted in Musharraf’s coup, to discuss setting up an opposition coalition, a spokesman for her Pakistan People’s Party said.

Musharraf is refusing to let Sharif return from exile in Saudi Arabia before the elections.

“She talked about the need for cooperation by all political parties on a one-point agenda aimed at the restoration of the constitution, lifting of emergency and holding free and fair elections,” said spokesman Farhatullah Babar.

Babar said no decisions had been taken.

He also said the makeup of the caretaker government was irrelevant so long as Musharraf remained in power.