Bhutto told Al Jazeera: "We were unable to come to an agreement with the Pakistan government at our last meeting on September 4. We were told they would get back to us in two days time but they didn't.
"Musharraf is shouting slogans of war against terror in order to win US support"
Ali Abu Hamza, Chichawatni, Pakistan
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"I have chosen to return to Karachi on October 18. I have chosen that city becuase it is where the founder of Pakistan is buried."
After Faheem's announcement of her return, Bhutto's supporters erupted into chants of "Long live Benazir! Prime minister Benazir!"
Kamal Hyder, Al Jazeera's correspondent in Islamabad, said: "As far as the government are concerned there are no restrictions here because she went into a self-imposed exile.
"However, after her talks with General Musharaff her image has been somewhat tarnished. People will tell you this is a deal made in Washington and Britain." 'Different case'
In an interview on Friday, Tariq Azim, deputy information minister, also drew a clear distinction between the rights of Sharif and Bhutto to return to Pakistan.
"Nawaz Sharif's case was different. He went back to Saudi Arabia because of an undertaking he had with the Saudi government. She [Bhutto] was always allowed to come back," Azim said.
Asked about pending corruption cases against Bhutto, he said: "It's for the law to take its own course. Everybody has to face cases against them and the same applies to her."
He said the talks with Bhutto had been delayed because of her demands for the corruption cases to be closed, for a constitutional amendment to let her seek a third term as prime minister, and over the president's re-election.
"The talks are continuing but not at the same pace we might have wished. It's in the national interest for a resolution between political leaders to be reached," Azim said.
"But it should be in the national interest, not in the personal interest of anyone."
When Faheem was asked about the possibility of Bhutto being arrested, he said: "We are ready to face any situation. We can handle any eventuality."
He confirmed that the on-off talks with Musharraf were again in limbo, but did not rule out chances of some understanding being reached.
"In democracy, the door for talks is never shut. The ball is in their court," he said. Possible backlash
Bhutto has led her party from exile since leaving Pakistan in 1999 over the corruption allegations.
She risks a backlash among the public and her party if she strikes an agreement with Musharaff, who forced Sharif from power in a bloodless coup in 1999.
|"We welcome her coming back, but let me say that it will be an insult to democracy if she agrees to share power with a man who ousted |
the elected government"
Sadiq ul-Farooq, senior figure in Nawaz Sharif's party
On Friday, Sharif's party urged her not to reach terms with Musharraf.
Sadiq ul-Farooq, a senior figure in the party, said: "We welcome her coming back, but let me say that it will be an insult to democracy if she agrees to share power with a man who ousted the elected government of Nawaz Sharif and has caused irreparable damage to democratic institutions."
With less than five weeks before the presidential election, Bhutto's party says time is running out, though with Sharif out of the way, Musharraf may be in a stronger position to dictate terms.
Azim said the schedule for the presidential vote would be announced in the next three or four days. General elections are due by January.
He confirmed reports that Chaudhry Shujaat Hussain, the chief of the ruling party, had suggested that Musharraf's wife, Sebha, could be a backup candidate for the presidency if Musharraf was ruled ineligible to run.
Azim defended the notion as "traditional" in Pakistani politics but said "I don't know if it would be acceptable to the president or his wife."