(Updates with Musharraf on election)

By Robert Birsel

ISLAMABAD, Nov 11 (Reuters) - Pakistan's President Pervez Musharraf, under pressure from rivals and Western allies to put Pakistan back on a path to democracy, said on Sunday a general election would be held by early next year.

Musharraf, the army chief who took power eight years ago, said Pakistan's National Assembly and provincial assemblies would be dissolved in coming days so elections can take place before Jan. 9.

But he did not say when he would end emergency rule, declared a week ago.

The general said he would quit the army and be sworn in as a civilian president once the Supreme Court struck down challenges against his Oct. 6 re-election.

"I hope that happens as soon as possible," Musharraf said in a news conference broadcast on state television. He added he expected all of those who had been detained over the past week would be released and would take part in the elections.

Opposition leader Benazir Bhutto earlier left Islamabad for the eastern city of Lahore, where she plans to begin a mass protest on Tuesday unless General Musharraf rolls back emergency rule and restores the constitution.

Since suspending the constitution a week ago, Musharraf has sacked most judges, locked up lawyers, rounded up most of the political opposition and rights activist, justifying his steps by saying the judiciary was hampering the battle against militants and extremism.

Diplomats say Musharraf's main objective in imposing the emergency was to stop the court ruling his re-election invalid, upholding rivals' protests that he was ineligible to contest while still army chief.

Musharraf said caretaker governments would be established as soon as the National Assembly is dissolved on Nov. 15 and the provincial assemblies on Nov. 20.

"This is history, ladies and gentlemen, because this is the first time all the assemblies will have completed their terms," Musharraf said.

U.S. President George W. Bush, who values Musharraf as an ally in the fight against al Qaeda and the Taliban, has said he expected Musharraf, who took power in a bloodless 1999 coup, to quit the army, become a civilian leader and hold elections.

EMERGENCY RULE

Before Musharraf declared emergency rule last Saturday, setting off a storm of criticism, elections had been expected by mid-January, two months after the expected dissolution of the national and provincial assemblies.

Bush said on Saturday that he took the Pakistani leader at his word.

"He knows my position," Bush said. "I do remind you that he has declared that he'll take off his uniform and he has declared there will be elections, which are positive steps.

"We also believe that suspension of the emergency decree will make it easier for the democracy to flourish," Bush added.

The United States is worried the turmoil will hamper its nuclear-armed ally's efforts against terrorism. Pakistani forces are battling a growing Islamist insurgency along the Afghan border -- where Osama bin Laden is believed to be hiding.

Bhutto, seen by Musharraf as a potential ally after national elections, was released from house arrest the same day and has kept up a barrage of criticism of the general's retreat into authoritarianism.

"Pakistan under dictatorship is a pressure cooker," Bhutto told diplomats at a reception hosted by loyalists at the Senate on Saturday night. "Without a place to vent, the passion of our people for liberty threatens to explode."

Supporters of Bhutto's Pakistan People's party clashed with police in Rawalpindi on Friday, after police stopped their leader from attending a anti-government rally there.

Police have used batons and teargas to disperse protesters in various parts of the country but there has been no major violence.

Musharraf briefed army commanders on Saturday, telling them the emergency had been a very difficult decision but necessary to ensure effective governance, maintain efforts against terrorism and provide for a stable political transition, the military said. (Additional reporting by Zeeshan Haider; Writing by Simon Cameron-Moore; Editing by Matthew Tostevin)

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