Updated

Former Prime Minister Nawaz Sharif's party dropped plans Sunday to boycott parliamentary elections, worried he could be left out in the cold after failing to convince rival Benazir Bhutto to also stay away to protest President Pervez Musharraf's state of emergency.

The decision is a mixed bag for Musharraf: Greater participation will make the balloting look more democratic after his credentials as a reformer took a hit over the Nov. 3 emergency declaration and his dismissal of independent-minded judges, but participation by the opposition will syphon away votes and seats from his own party.

While some parties still say they won't participate in the Jan. 8 polls, the prospect of a general opposition boycott has collapsed in recent days, and the three largest groups, including Musharraf's party, now will field candidates.

Sharif had hoped to convince Bhutto to have her Pakistan People's Party join a boycott, but she said last Thursday that her supporters would participate. Then the All Parties Democratic Movement, comprised of 33 parties and political groups led by Sharif's Pakistan Muslim League-N, met Sunday to cobble together a joint stance.

Five hours of debate yielded only agreement to disagree on the boycott, which the parties tried to paper over by saying they are committed to fighting Musharraf. They now will make their own decisions on whether to stay away.

"Since we could not reach any agreement with People's Party and they are contesting polls, we cannot leave the field open," said Ahsan Iqbal, spokesman for Sharif's Pakistan Muslim League-N party.

Still, in the current volatile political environment, last-minute snags remain possible with several opposition leaders claiming the government is preparing to rig the vote. Musharraf guaranteed Sunday the elections will be "free and fair."

"We haven't even gone for elections and they are talking of rigging and everything," the former army general told CNN in an interview. "This is a clear indication of their preparation for defeat. Now when they lose, they'll have a good rationale, that it is all rigged, it is all fraud. In Pakistan, the loser always cries, and that is an unfortunate part."

The president, who doffed his uniform last month eight years after taking power in a coup that ousted Sharif, said he will lift the emergency next weekend.

A large boycott would have undermined Musharraf's efforts to legitimize the new presidential term he won in October in a vote by a Parliament stacked with his supporters. U.S. Ambassador Anne Patterson has repeatedly urged all opposition parties to take part in the elections.

The right-wing Jamat-e-Islami party, several nationalist parties and the party of former cricket star Imran Khan were still pressing for a boycott.

"By going to the polls, in fact we will give legitimacy to Pervez Musharraf and his illegal acts," said Syed Munawar Hasan, secretary general of Jamat-e-Islami.

Despite the dissension on the issue, Raja Zafarul Haq, chairman of Sharif's PML-N party, said the opposition coalition remains committed to fight what they call Musharraf's dictatorship.

"Opposition parties can take different paths but their aim is common — rule of law and get rid of dictatorship," Haq said.

He said Sharif will start trying to mobilize the masses by visiting Faislabad, Karachi and other parts of the country in the coming days.

"This is the most effective way to pressure this government; to restore judges, restore the Constitution," Haq said.

Ongoing talks on a list of preconditions for opposition participation between Nawaz's party and Bhutto's PPP are deadlocked over the key demand that Musharraf reinstate the judges he sacked and detained. His hand-picked replacements on the court immediately dismissed all complaints against Musharraf's re-election.

Sharif's party earlier had favored a boycott unless the judges are reinstated, but Bhutto says the new Parliament should decide the issue.

Meanwhile, a suicide bomber killed eight people by ramming his explosives-laden car into a police outpost in the scenic northern valley of Swat, where government forces have been battling to regain control of towns lost to Islamic insurgents. It was the latest in a series of suicide attacks on members of the security forces in the past year.

Musharraf had cited the stepped-up militancy in northern regions like Swat in imposing the state of emergency — a move critics said was actually designed to silence opposition forces.