She said: "The uniform issue is key and there has been a lot of movement on it in the recent round of talks."
 
Issue resolved
 
Bhutto and Sharif had met in 2006 and agreed
to oppose Musharraf's rule [GALLO/GETTY]
Musharraf's government would have to make "an upfront gesture of reciprocity, a clear indication of political support for the Pakistan People's Party".

Her other conditions for a power-sharing deal are that she is immune from prosecution, the lifting of a ban on prime ministers serving a third term, and a curbing of presidential powers to sack the government.

In a separate interview, with the Financial Times, also published on Wednesday, Nawaz Sharif, another former prime minister and leader of the Pakistan Muslim League, said he planned to return to Pakistan in two weeks to lead a campaign to topple Musharraf.

He called Bhutto's attempts to deal with Musharraf a "setback" and a "clear violation" of a deal agreed between them to do "no deals with military dictators".
 
Court challenge
 
In another development with potential political ramifications, Pakistan's supreme court agreed on Wednesday to hear an appeal against Musharraf's role as army commander.
 
The application was filed by Qazi Husssain Ahmed, the chief of Pakistan's main coalition of Islamist parties - the Muttahida Majlis-e-Amal, or United Action Front.
 

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Javed Iqbal, a judge of the court, said: "The petition is fixed for regular hearing."

He said that objections from the court registrar's office that Ahmed had no authority to lodge the appeal, were "devoid of merit".
 
Musharraf, who seized power in a bloodless military coup in 1999, is seeking re-election as president-in-uniform by parliament in September or October.

"The people are fed up with the unconstitutional and dictatorial military regime," Ahmed said outside the court.

The application says that under military regulations, Musharraf's term as chief of army staff had expired in 2001.

Public pledge
 
The application also states that he was no longer eligible to continue in the post after turning 60 in August 2003.

The legal challenge argues that in 2004, Musharraf had broken a public pledge to hang up his military uniform.

Musharraf has suffered a series of legal setbacks since his attempt in March to sack Iftikhar Muhammad Chaudhry, the chief justice of the supreme court.

The court had reinstated Chaudhry in July after months of nationwide protests and then ruled last week that Nawaz Sharif, a former prime minister, could return from exile.