Commonwealth foreign ministers have given Pakistan 10 days to lift its emergency rule or face suspension.
A state of emergency was declared on 3 November
After an extraordinary session in London, they also said President Pervez Musharraf had to step down as army chief and release political detainees.
In Pakistan, opposition leader Benazir Bhutto was given a seven-day detention order hours before she was due to lead a march from Lahore to the capital.
The march was aimed at pressuring Gen Musharraf to ease current restrictions.
The Pakistani leader says a parliamentary poll will be held in January, but opposition leaders want an end to emergency rule first.
The United States has been pushing him to accept a power-sharing deal with Ms Bhutto to help shore up his war against Islamist extremists.
Ms Bhutto returned to Pakistan from self-imposed exile last month with the approval of Gen Musharraf.
However, in the wake of the current crisis, she said on Monday there would be no more talks with Gen Musharraf.
When asked if this marked a change in policy, she said: "Yes, it is a change, it is a change from my party's past policy."
The BBC's Jill McGivering at the Commonwealth talks in London says that some bloc members had wanted Pakistan's immediate suspension, others no action at all. In the end, our correspondent say, the ministers hit upon a classic Commonwealth compromise.
They have demanded that Gen Musharraf restore Pakistan's constitution and ease other measures imposed when the president declared a state of emergency on 3 November before their next meeting on 22 November in Uganda.
Gen Musharraf has promised elections by 9 January
The 53-nation bloc is also pushing for the lifting of all media restrictions.
Secretary-General Don McKinnon said that if Gen Musharraf did not meet this deadline, Pakistan would be suspended when the Commonwealth ministers meet.
"CMAG [Commonwealth Ministerial Action Group] agreed that at its next meeting on 22 November, if after review of progress Pakistan has failed to implement these necessary measures, it will suspend Pakistan from the councils of the Commonwealth," he told reporters.
Reading from a joint statement, Mr McKinnon said: "CMAG welcomed the announcement by General Musharraf that parliamentary elections will be held before 9 January 2008 but stressed that such elections would not be credible unless the state of emergency is removed and constitutional rights of the people, political parties and independence of the judiciary are restored."
"The group expressed its concern at the dismissal of the chief justice and several other judges and their placement under house arrest which are deemed constitute a severe breach" of Commonwealth principles, he added.
Benazir Bhutto returned from self-imposed exile last month
The UK representative at the talks, Foreign Office Minister Lord Malloch-Brown, told the BBC that the bloc had decided against suspending Pakistan immediately because "there has been some progress in the last few days".
"After talk of postponing elections for a year, instead he [Gen Musharraf] committed to hold them on 9 January. So we feel that this kind of engagement has won some important progress," Lord Malloch-Brown said.
"But now we've got to see if we can get much bigger progress over the next 10 days, and if we can't Pakistan will be suspended."
Pakistan was suspended from the Commonwealth in 1999, after Gen Musharraf seized power in a coup.
It was reinstated in 2004.