The party of Pakistan's late former prime minister, Benazir Bhutto, is meeting to pick the next prime minister after its victory in Monday's polls.
Ms Bhutto's party won the highest share of votes in Monday's polls
The Pakistan People's Party (PPP) earlier agreed to co-operate in government with the opposition PML-N, led by another former PM, Nawaz Sharif.
Asif Ali Zardari, the PPP leader and Ms Bhutto's widower, is not eligible to run for PM but retains great influence.
The coalition government is seen as a threat to President Pervez Musharraf.
The main party loyal to the president fared poorly in the parliamentary elections.
As president, Mr Musharraf did not personally contest the polls and has brushed aside calls for him to resign.
In a separate development, an explosion in the Swat region of Pakistan's North West Frontier Province has killed 13 people and hurt a dozen others, officials say.
The blast targeted a vehicle carrying guests from a wedding party.
Swat, a former tourist resort, has recently seen intense clashes between Islamist militants and government forces.
Newly-elected MPs of the PPP are meeting Mr Zardari to discuss whom to nominate as prime minister in a future government.
The PPP's 87 seats in the election were the highest polled by a single party, giving it about one third of the seats.
The PML-N came second, with 66 seats.
Details of the coalition - agreed between Mr Zardari and Mr Sharif on Thursday - have yet to be worked out.
Mr Zardari said the two parties would "stay together" but they had lots to work out.
"We have a lot of modalities to cover. We have a lot of ground to cover," he said. "We will be meeting off and on. In principle, we have agreed to stay together."
According to the BBC's Chris Morris in Islamabad, a coalition between the PPP and PML-N raises the prospect of a government which will try to force President Musharraf from power.
Though the two parties have little in common ideologically, both insist that they want to work together to re-establish full civilian democracy and the power of parliament.
The two parties have more than half of the new parliament's seats and if they can form a grouping with a two-thirds majority, they could call for Mr Musharraf to be impeached.
Mr Sharif has been deeply critical of the president and says he wants "to rid Pakistan of dictatorship forever".
Mr Musharraf has said he will not resign or retire, but instead wishes to work towards stable democratic government in Pakistan.
Mr Musharraf seized power from then-Prime Minister Nawaz Sharif in a military coup in 1999 and was re-elected to the presidency in October in a parliamentary vote boycotted by the opposition as unconstitutional.
Mr Musharraf has been a major US ally in the "war on terror" but his popularity has waned at home amid accusations of authoritarianism and incompetence.
Our correspondent says the prospect of a prolonged confrontation between the president and the new government will not please the US, which has urged the two sides to co-operate.
Mr Musharraf's forces have been trying to contain a Taleban-influenced Islamist insurgency along the country's rugged frontier with Afghanistan.
Monday's election was preceded by months of violence, including the suicide attack that killed PPP leader, Ms Bhutto, in December.
The poll was initially scheduled for early January but was delayed after her assassination.