Pakistan's exiled former premier said Wednesday that President Gen. Pervez Musharraf had agreed to step down as army chief, a move she expected before the next presidential elections, and that corruption charges would be dropped against her and dozens of other parliamentarians.

Benazir Bhutto has been in long-standing negotiations to return Pakistan to civilian rule. "I expect that he will step down (as army chief) before the presidential elections, but that is for the president to say," Bhutto told The Associated Press.

Envoys for the U.S.-allied military president and former Prime Minister Bhutto, who is planning a return from exile abroad, are trying to work out a pact that would help Musharraf secure another five-year presidential term.

Bhutto and other opposition leaders argue that the constitution obliges Musharraf, who seized power in a coup in 1999, to give up his post as military chief before he asks lawmakers for a fresh mandate in September or October.

Musharraf's future is clouded by a clamor for an end to military rule, fallout from a lost battle against the judiciary and the plans of Nawaz Sharif, another former premier, to also mount a dramatic political comeback.

In the past, Musharraf vowed to prevent Sharif and Bhutto from re-entering Pakistan. He blames them for the corruption and economic problems that nearly bankrupted the country in the 1990s, when Bhutto and Sharif each had two short-lived turns as prime minister.

But with the United States pressing for more democracy and redoubled efforts against Al Qaeda and Taliban militants near the Afghan border, Musharraf recently began calling for political reconciliation and an alliance of moderates to defeat extremists.

Musharraf's authority has greatly eroded since March, when he tried unsuccessfully to remove the Supreme Court's top judge. The move triggered protests that snowballed into a broad campaign against Musharraf's rule.

The court reinstated the judge in July, raising expectations that it also will uphold legal challenges to Musharraf's re-election plan likely to be filed by Sharif as well as religious parties opposed to Pakistan's close alliance with Washington.

Last week, the court ruled that Sharif, the prime minister Musharraf toppled in 1999, can come home, despite a promise in 2000 that he would stay away for a decade in return for his release from jail.