Bhutto's body, accompanied by Asif Ali Zardari, her husband, and their three children, was flown in a military aircraft to Sindh hours after she was killed.
Plea for patience
People started crying and wailing as Bhutto's coffin was brought to her family home in an ambulance.
"Show patience. Give us courage to bear this loss," Zardari urged the mourners as the coffin was carried into the house.
The PPP said it would observe a 40-day period of mourning while Nawaz Sharif, another opposition leader and former prime minister, has called for a nationwide strike on Friday.
Residents of Larkana said a grave for Bhutto was being dug at the family graveyard in Garhi Khuda Baksh, a village 5km from the Bhutto home in the small town of Naudero.
She will be buried next to her father Zulfikar Ali Bhutto, the country's first popularly elected prime minister, toppled by the military in 1977 and later hanged.
According to Islamic tradition, funerals should be held as quickly as possible. Party officials said the funeral would be held on Friday.
Pervez Musharraf, the Pakistan president, condemned the killing and announced three days of mourning. Schools and banks will also be closed.
Tension was running high in Sindh and its capital, Karachi, where Bhutto was born in 1953.
Protesters torched dozens of cars and set fire to banks and government offices in several towns and cities.
The violence is believed to have left at least nine people people.
A Reuters reporter travelling through Sindh said he had seen hundreds of burnt-out vehicles, and people were coming out on Friday morning and setting fire to more and trying to block roads.
And on Friday, unidentified assailants shot dead a policeman in a neighbourhood of Karachi, a traditional stronghold of the PPP.
"Unknown people gunned down a police constable in Lyari this morning," said Fayyaz Khan, a senior police official.
Bhutto returned to Pakistan from eight years of self-imposed exile in October.
She survived a suicide-bomb attack during her homecoming procession in Karachi that left about 140 supporters dead.
Thursday's tragic events began when an attacker opened fire as Bhutto waved to supporters from a vehicle while departing from the rally in Rawalpindi.
The attacker then blew himself up, killing 20 other people, according to witnesses and police.
Bhutto was declared dead after she was taken to the Rawalpindi general hospital.
|An attacker shot Bhutto, centre, before
blowing himself up at the Rawalpindi rally [AFP]
Hundreds of grieving supporters later carried her plain wooden coffin aloft from the local hospital to an ambulance that took it to Rawalpindi's military airport.