The widower of assassinated Pakistani politician Benazir Bhutto has ruled himself out as prime minister, despite his party's success at the election.
The opposition PPP is celebrating the election result
Asif Ali Zardari said his PPP party would choose another candidate to lead a coalition government that opposition parties are expected to form.
President Pervez Musharraf has called for reconciliation after his party's defeat, but he ruled out stepping down.
He said the polls had strengthened moderate forces inside the country.
Mr Zardari, a deeply divisive figure in Pakistani politics who has spent several years in prison on corruption charges, is not an MP and is therefore not currently eligible to serve as prime minister.
But there had been speculation that he might enter parliament via a by-election.
Forging a coalition
He was speaking as negotiations between the PPP and the other main opposition party, ex-Prime Minister Nawaz Sharif's Pakistani Muslim League-Nawaz (PML-N), intensified.
NATIONAL RESULTS SO FAR
PPP (Bhutto's party) : 87
PML-N (Nawaz Sharif): 66
PML-Q: (pro-Musharraf) 39
MQM (Sindh-based): 19
ANP (Secular Pashtuns): 10
MMA (Islamic alliance): 3
Source: Election commission
The two leaders are due to meet on Thursday and correspondents say the most likely coalition is between the two, as they would have more than half of parliament's seats between them.
The main party backing President Musharraf suffered a heavy defeat, and correspondents say the president appears to be in a very difficult position.
If a new governing coalition manages to muster a two-thirds majority in parliament, it could call for Mr Musharraf to be impeached.
Mr Zardari told reporters in Peshawar that his party could work with the MQM, a Sindh-based regional party which supports Mr Musharraf.
Mr Sharif has urged Mr Musharraf to resign, and a PPP statement cited alleged remarks by the president that he would step down if the parties supporting him were defeated in elections.
Nawaz Sharif (centre) has called on Mr Musharraf to resign
But Mr Musharraf said that he would try to work with any new government.
"The president emphasised the need for harmonious coalition in the interest of peaceful governance, development and progress of Pakistan," he said in a statement released by the foreign ministry.
"The elections have strengthened the moderate forces in the country."
In an earlier interview for the US newspaper the Wall Street Journal, Mr Musharraf said he would not resign or retire.
He was re-elected to the presidency last October, in a parliamentary vote boycotted by the opposition as unconstitutional.
He has been a major US ally in the "war on terror" but his popularity has waned at home amid accusations of authoritarianism and incompetence.
Alliance not guaranteed
Mr Zardari earlier said his party would "form a government of national consensus which will take along every democratic force".
HAVE YOUR SAY
Perhaps Musharraf should leave Pakistan so that reforms can begin
"For now, the decision of the party is that we are not interested in any of those people who are part and parcel of the last government," he said, seemingly ruling out any coalition with the Pakistan Muslim League's pro-Musharraf wing, the PML-Q.
With votes counted in 258 out of 272 constituencies, the PPP has won 87 seats, according to the Election Commission of Pakistan.
The PML-N is in second place with 66 seats so far.
Mr Sharif has said is prepared to discuss joining a coalition with Mr Zardari's party in order "to rid Pakistan of dictatorship forever".
But the BBC's Chris Morris in Islamabad says that, while a coalition between the two is the most likely option, there are certainly issues on which they disagree and there are no guarantees an alliance will emerge.