Al Jazeera's Karl Stagno-Navarra spoke the opposition leader on Sunday in the UK where she has been addressing her supporters.
"The government has denied the said meeting but my party and I are in contact with Musharraf," she said.
"This is about a transition to democracy. Right now the prime minister is also the army chief, and that has blurred the lines."
Power talks
Bhutto, 54, said her party also wanted Musharraf to meet the growing public demand for free and fair elections.
Pakistani media on Saturday quoted a government minister confirming that both leaders had met in Abu Dhabi on Friday.
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"I don't want the people of Pakistan to face terror at the hands of the Taliban and their allies in al-Qaeda and become refugees in foreign lands"
Benazir Bhutto, former Pakistani PM |
A potential deal would include changing part of Pakistan's constitution which currently blocks Bhutto from becoming prime minister again.
Bhutto said it was "very important to deal with who's there".
"He is the person there and if we can find a way to get the uniformed presidency out of the picture, we can find a way to get democracy back... we will be looking forward," she said.
"We're not there yet," she told SKy News television from Leeds.
'Pakistan at crossroads'
Al Jazeera's correspondent in Islamabad, Kamal Hyder, earlier reported that the government was keeping quiet about the whole affair.
Hyder reported that Pakistanis did not want a government decided by Musharraf as he has become unpopular, but nor do they want Bhutto "because she is not in a position to stem the wave of anger in this country".
Bhutto served as prime minister twice in the 1980s and 1990s, but fled the country to avoid corruption charges after her second government collapsed.
Musharraf has been a staunch ally of the US in its war on terror but with pressure increasing from Washington, Bhutto has tried to position herself as a champion of democracy.
Earlier this month, she attacked Musharraf's record of fighting extremism, but left open the possibility of returning to the country while he was still president.
Bhutto said she wanted to return to national politics to help stabilise her country because it has become a struggle for "the heart and soul of Pakistan".
"We stand at the crossroads. Very critical choices have to be made between the forces of the past and the forces of the future. There is militancy, terrorism and violence," she said.
"I don't want the people of Pakistan to face terror at the hands of the Taliban and their allies in al-Qaeda and become refugees in foreign lands. I want to try and save my country, if I can."