Former Pakistani Prime Ministers Benazir Bhutto and Nawaz Sharif have signed a "charter for democracy" ahead of elections due in 2007.
Ms Bhutto - 'we are victims of dictatorship'
Both say they will return to the country to take part in the campaign and to work for an end to the rule of Gen Musharraf.
The two leaders did not say when they would go home.
Mr Sharif is in exile after being deposed in 1999. Ms Bhutto could face criminal proceedings on her return.
The two ex-premiers signed the charter in a ceremony in London. It incorporates a range of measures, some constitutional, for the future of Pakistan.
Mr Sharif was exiled to Saudi Arabia
In February they signed a similar agreement in the Saudi city of Jeddah.
Security operations in Pakistan's tribal area on the Afghan border, allegations of corruption and cronyism against the military, and what is perceived as Pakistan's unquestioning support of the United States, have dented President Musharraf's popularity in recent months.
Ms Bhutto's Pakistan People's Party and Mr Sharif's Muslim League netted over 10 million votes between them in elections in 2002.
The BBC's Aamer Ahmed Khan in Karachi says their Charter for Democracy skirts the critical issue of a definite date for their return home.
Without their physical presence in Pakistan, their parties have struggled to mount a serious challenge to President Musharraf's rule.
On the other hand, our correspondent says that if the alliance holds, it could eventually turn into the most significant stance to date taken by the country's main parties against the military's control of politics.
Their parties were severely damaged by the defection of deputies to a party loyal to President Musharraf after his bloodless 1999 coup.
In a BBC interview, Ms Bhutto brushed aside the well-known past antagonisms between the two.
"It's true that there were major differences between the two parties in the past.
"But we have both been victims of military dictatorship and so we have an understanding of the larger picture."
If Mr Sharif returns to Pakistan without the consent of the government, he would be in breach of the agreement he reached with President Musharraf after the coup to live in exile. Ms Bhutto, accused of corruption, would face arrest the moment she set foot on Pakistani soil.