By Syed Shoaib Hasan
BBC News, Islamabad
Nawaz Sharif's planned procession could be explosive
Pakistan's former Prime Minister Benazir Bhutto says negotiations with the country's leadership have broken down and that she will announce the day she is coming home on 14 September.
Nawaz Sharif, another exiled former PM, has already fixed a date for his return - 10 September - and he will head a procession through Punjab province, the country's political heartland, to his home city of Lahore.
The homecoming of these two former leaders is little short of a nightmare for President Pervez Musharraf and his allies.
Over the past six months, they have seen a seemingly assured victory in upcoming elections vanish.
The incident that can claim the greatest role in the president's turmoil is his suspension of Chief Justice Iftikhar Chaudhry in March.
The resulting storm of political protests greatly weakened his position.
It also created an openly hostile judiciary, which recently ruled that Mr Sharif could return to the country.
The situation led Gen Musharraf into serious negotiations with Ms Bhutto, the leader of the PPP, Pakistan's largest political party.
Gen Musharraf wants to remain both president and head of the army. But to do this needs an amendment to the constitution.
The suspension of the chief justice started the current crisis
That would require a two-thirds majority in parliament - which would only be possible if he were to secure votes from one of the opposition parties.
Ms Bhutto was willing to talk because she too needs a constitutional change.
The constitution currently allows a prime minister to be elected only twice and she, like Mr Sharif, has already served two terms.
She would hope for an amendment allowing her a third term and then a favourable result in the election.
But Ms Bhutto has added a new proviso - she wants to remove the presidential power to dissolve parliament.
President Musharraf is unlikely to give this up - as it allows him some modicum of leverage.
He will not want to be at the mercy of a popularly elected parliament.
Ms Bhutto's upping of the ante may be a response to Mr Sharif's reappearance.
He has said he will not accept President Musharraf in or out of uniform and that anyone who deals with the general is a traitor to democracy. In doing so he has tapped much public sentiment.
As for President Musharraf - he has always defended his actions as a blueprint for stability.
In the past six months they have seemed anything but.
Ms Bhutto's party knows it must deal with the military
Now the role of his main power source - the military - is becoming key.
The general opinion about the chief in the army is that he has done a good job for the country.
But there are some people who now say it is time for him to go.
Analysts point to the re-emergence of the Inter-Services Intelligence (ISI) - the largest and most powerful intelligence agency - as the chief negotiator in any political deal.
The ISI had been sidelined by the lesser known MI (Military Intelligence) over the past three years, but is now back.
It is sure to try to steer Pakistan in the direction of what it regards as the country's national interest.
In the current international scenario, that means a moderate and secular leadership.
In Pakistan, this translates into a PPP government.
Nevertheless, as long as Gen Musharraf is chief of the army staff, he will have to be accommodated.
The president also faces problems with the ruling PML-Q party.
Already cracks have appeared. Most of its members are originally from the Sharif-led PML-N.
Can Gen Musharraf rely on the support of the military himself?
Several parliamentarians have already defected or announced their opposition to Gen Musharraf's re-election.
Mr Sharif has seen this and continues to play his cards cleverly. He says he will give amnesty to those leaving the ruling regime.
The PML-Q leadership feels betrayed by the president's open talks with Ms Bhutto.
This is particularly true for PML-Q chief Shujaat Hussain and his cousin, Punjab Chief Minister Chaudhry Pervez Ellahi.
The Chaudhrys had formed the backbone of Gen Musharraf's regime.
But all that appears to be at an end.
However, they will have one potentially explosive role to play.
The procession of their most hated opponent - Nawaz Sharif - will fall under Punjab police jurisdiction.
Mr Ellahi has already met police chiefs to discuss "contingency measures".
It appears to be a situation brimming with potential for violence and could result in a catastrophe for an already highly unpopular regime.
It could also ignite Mr Sharif's campaign to be Pakistan's saviour.
However, maybe all is not lost for President Musharraf.
Ms Bhutto did say talks had broken down. But she did not rule out the possibility of success later - perhaps propping up a dying regime.
And there are reasons the PPP wants a deal.
It is not just an arrangement with the president but with the army too. Even if it wins the election, the PPP will have to live with the real power broker.