Pakistan?s Supreme Court is expected to resume a hearing into challenges to President Pervez Musharraf?s election victory this week and could reach a decision by the weekend, a newspaper reported yesterday.

Army chief Musharraf imposed emergency rule on November 3, suspending the constitution, sacking most top judges, locking up lawyers and rounding up most of the political opposition and rights activists.

He justified his steps by saying the judiciary was hampering the battle against militants and interfering with governance. But diplomats say Musharraf?s main objective was to stop the Supreme Court ruling his October 6 re-election invalid. Rivals had filed legal challenges in the Supreme Court arguing Musharraf was ineligible to contest while army chief.

Musharraf, under pressure from Western allies and rivals to put the nuclear-armed country back on a path to democracy, said on the day before a general election would be held by January 9. But he declined to say when the emergency would be lifted and the constitution restored.

He also said he would step down as army chief and be sworn in as civilian president as soon as the Supreme Court ? where new judges seen as friendly to the government have been appointed ? ruled on the challenges to his election. Attorney General Malik Adul Qayyum said the court would most likely resume its hearing into challenges against Musharraf?s candidacy tomorrow and he was hopeful the case would be decided by the weekend, the Daily Times reported.

Opposition leader Benazir Bhutto, who has been demanding an end to emergency rule and a speedy election, welcomed Musharraf?s announcement on the election as positive but said much more was needed and she would continue a protest campaign. US Secretary of State Condoleezza Rice also welcomed the announcement but called for an end to emergency rule.

Musharraf has seen his popularity plummet since he first tried to sack the chief justice in March, but analysts say he retains the crucial support of the army. ?The emergency is not good, it isolates us from the international community,? said Sadruddin, an elderly man with a beard and turban selling snacks outside the High Court in Lahore. ?He should quit altogether,? he said of Musharraf. But lawyer Sayed Wahid Hussain said he supported the emergency and Musharraf should stay on as army chief and president: ?He has shown so much tolerance.?

Pakistani stocks, hurt by the emergency, rose early yesterday on Musharraf?s election announcement, share dealers said. The United States is worried the turmoil will distract its ally?s attention from efforts against al Qaeda and the Taliban.

Pakistani forces are battling an Islamist insurgency spreading from the Afghan border ? where Osama bin Laden is believed to be hiding ? into so-called settled areas.

The United States has said it expects Musharraf, who took power in a bloodless 1999 coup, to quit the army, become a civilian leader and hold fair elections.

Bhutto arrived in the eastern city of Lahore on the day before to prepare for a ? long march? motorcade protest to Islamabad, beginning today. Bhutto, who has the capacity to mobilise huge crowds, has also called for the reinstatement of sacked judges, but Musharraf ruled that out.

Opposition supporters have clashed with police in various parts of the country, most recently in Bhutto?s home province of Sindh on the day before, but there has been no major violence. The government says 2,500 people have been detained during the emergency, although Bhutto?s Pakistan People?s Party says well over 5,000 of its activists have been picked up.

Musharraf said he expected politicians detained since the emergency to be freed to take part in the elections. Bhutto and Musharraf have been involved in power-sharing talks for months and Bhutto said she was not shutting the door to more. Musharraf said parties could talk after the election.