Pakistan's Election Commission on Wednesday postponed a general election by six weeks due to the turmoil sparked by the assassination of Benazir Bhutto.
"Polling will now be held on Feb. 18 instead of Jan. 8," chief Election Commissioner Qazi Mohammad Farooq told a news conference.
The killing of the opposition leader has fuelled doubts about stability and the transition to democratic rule in nuclear-armed Pakistan, a crucial U.S. ally in its anti-terrorism efforts.
The Election Commission had said on Tuesday that "in principle" the vote would be delayed but Bhutto's party objected and analysts said a postponement could lead to more violence.
Bhutto's party would expect to reap a considerable sympathy vote following her assassination in a gun and bomb attack as she left a rally in Rawalpindi on Thursday.
The commission said many of its offices in Sindh, Bhutto's home province, were burnt in the rioting that followed her murder and election material including voter rolls destroyed.
Nearly 60 people were killed in the violence and, while the situation has now calmed, it remains tense. Markets are gripped by fears of capital flight if security worsens.
President Pervez Musharraf was due to give a televised address at 8 p.m. New York time. A close aide told Reuters the president would announce he was to seek international help in investigating Bhutto's murder.
Pakistani shares slid 2.3 percent as political nerves suddenly returned to the market ahead of the Musharraf address.
"There were rumours in the market that Musharraf will make some negative announcement in his speech later today," said Shuja Rizvi, director of broking operations at Capital One Equities.
Dealers said the rumours included talk of reimposition of emergency rule, which Musharraf imposed for six weeks beginning in early November, or even Musharraf's resignation. The Karachi market often reverberates to unfounded political rumours.
Officials were not immediately available for comment but had made no mention of such developments earlier.
Supporters of Bhutto's Pakistan People's Party (PPP) and the other main opposition party, led by former prime minister Nawaz Sharif, had wanted the election to go ahead next week as planned, fearing a delay would work to Musharraf's advantage.
Bhutto's widower, Asif Ali Zardari, the new co-chairman of the PPP alongside their 19-year-old son Bilawal, has called a party meeting for later on Wednesday.
"The January 8th elections must proceed as scheduled," Zardari had said in a joint statement with Sharif on Tuesday.
"This will not only be a tribute to the memory of Benazir Bhutto, but even more important, a reaffirmation of the cause of democracy for which she died."
The Pakistan Muslim League, which backs Musharraf, had said it had no objection to deferring the vote over security concerns.
"A delay in the election is a bad thing because of the sentiment among PPP supporters. If they postpone it, the PPP will protest against the government. There will be destabilisation," said Karachi banker Mohammad Sayeed.
Bhutto, relatively liberal by Pakistan's standards and an opponent of Islamist militancy, returned from self-imposed exile in October. Hours after arriving home she narrowly escaped a suicide blast against her motorcade that killed about 140 people.
Her death wrecked U.S. hopes of a power-sharing deal between her and Musharraf, who took power in a military coup in 1999 but left the army in November to become a civilian president.
Authorities published on Wednesday photographs of a severed human head and two men standing in a crowd outside Bhutto's Thursday rally moments before she was killed and offered a reward of 10 million rupees ($164,000) for their identification.
The government has blamed an al Qaeda-linked militant based on the Afghan border for Bhutto's murder but many Pakistanis believe others from among Bhutto's enemies, perhaps from within the powerful security agencies, were involved.
Bhutto's party has called for a U.N. investigation.
Foreign Ministry spokesman Mohammad Sadiq said the government was open to outside assistance and the United States and Britain had offered help. French Foreign Minister Bernard Kouchner, visiting Pakistan on Tuesday, had also offered help, he said.