President Gen. Pervez Musharraf and his aides were finalizing a caretaker government Thursday, while his two main rivals — once bitter enemies themselves — opened talks on forming an alliance against him.

Nov. 15 marks the end of the current Parliament's five-year term. Musharraf's concurrent presidential mandate also expires Thursday, though he has extended it by calling a state of emergency that has cast Pakistan into a deep political crisis.

The caretaker administration will be charged with guiding Pakistan toward parliamentary elections to be held by Jan. 9.

A senior Cabinet minister said that Mohammedmian Soomro, chairman of the upper house of Parliament, was a strong candidate for the key position of caretaker prime minister.

"I see him as the caretaker prime minister, but any final decision will be announced by President Musharraf," Railways Minister Sheikh Rashid Ahmad told The Associated Press.

Pakistani media say that a retired general serving as ambassador to Turkey, Iftikhar Hussein Shah, and a former central bank governor, Ishrat Hussain, are also in the running.

State television said an announcement was expected later Thursday.

The vote is supposed to complete the restoration of democratic rule in Pakistan, eight years after Musharraf seized power in a bloodless coup.

However, both opposition parties and Western governments say that the vote cannot be considered free and fair unless the general quickly lifts the emergency, which many in Pakistan are equating with martial law.

Musharraf seized extraordinary powers on Nov. 3 and used them to detain thousands of opposition and human rights activists, purge the senior judiciary and black out independent TV news channels.

The United States still counts Musharraf as a stalwart ally in its war on terror. But it wants him to share power with other moderates, such as former Prime Minister Benazir Bhutto, to harness more political support for Pakistan's struggle against Islamic extremists while also ending military rule.

Musharraf says the main purpose of the emergency is to protect the effort against extremism from interfering judges and political turbulence.

But the crackdown on dissent has triggered a rapid downward spiral in his relations with Bhutto, a pro-Western secularist like himself but also a fierce political competitor.

Bhutto called Tuesday for Musharraf to leave power and joined other opposition parties in threatening to boycott the election.

She spoke by telephone Wednesday with Nawaz Sharif, whose government was ousted in Musharraf's coup, to discuss setting up an opposition coalition, a spokesman for her Pakistan People's Party said.

"She talked about the need for cooperation by all political parties on a one-point agenda aimed at the restoration of the constitution, lifting of the emergency and holding free and fair elections," said spokesman Farhatullah Babar.

Babar said no decisions had been made.

Authorities on Tuesday placed Bhutto under house arrest for the second time in a week to prevent her from leading anti-Musharraf rallies.

On Thursday, a U.S. diplomat was allowed to cross the barricades and heavy police cordon surrounding the house in the eastern city of Lahore where Bhutto has been confined.

Sherry Rehman, a Bhutto spokeswoman, said Bryan Hunt, the U.S. consul general in Lahore, was making merely a "courtesy call" on Bhutto.

However, it comes a day after the White House issued a blunt call for Musharraf to relent and on the eve of a visit to Pakistan by Deputy Secretary of State John Negroponte.

"We don't see how it is possible to have free and fair elections under emergency rule," White House press secretary Dana Perino said Wednesday. Musharraf should return to democracy "as soon as possible — we think as soon as possible is now," Perino said.

Those comments followed a statement by Musharraf in an AP interview that he expects to quit as chief of the army by the end of November, heralding a return to civilian rule.

However, he rejected Western pressure to quickly end the state of emergency.

Musharraf said rising Islamic militancy required him to stay in control of the troubled nation though left the door open for future cooperation with Bhutto if she wins the January vote.

"Emergency is in fact meant to make sure that elections are held in a peaceful manner," Musharraf said. "I take decisions in Pakistan's interest and I don't take ultimatums from anyone."