Pakistani President Pervez Musharraf's opponents won a big election victory on Tuesday after voters rejected his former ruling party, raising questions about the future of the U.S. ally who has ruled since 1999.

Counting was continuing with results still awaited in less than 20 seats, but no party was expected to win a majority in the 342-seat National Assembly.

The opposition parties of assassinated former Prime Minister Benazir Bhutto and former Prime Minister Nawaz Sharif appeared to have won enough to command a majority, according to unofficial results. But there is no certainty that they will work together.

The pro-Musharraf Pakistan Muslim League was trailing a distant third, and the party's spokesman conceded defeat but kept open the possibility of joining a coalition.

Obviously, the nation has spoken through the ballot. We couldn't convince them. They have rejected our policies and we have accepted their verdict, PML's Tariq Azim Khan told Reuters.

For the best interest of the country, we're willing to cooperate and work with anybody.

As of 3.30 p.m. (5:30 a.m. EST), unofficial results for 252 seats showed Bhutto's Pakistan People's Party (PPP) had won 86 and Sharif's Pakistan Muslim League (Nawaz) had 65.

The pro-Musharraf PML trailed with 37. Small parties and independents shared the others.

A few seats weren't contested, while 70 seats reserved for women and religious minorities will be divided up proportionately among parties according to the number of seats they've won.

Musharraf has said he would accept the results and work with whoever won to build democracy in a country that has alternated between civilian and army rule throughout its 60-year history.

DECISIVE FACTOR

Groups of happy opposition supporters celebrated in the streets in cities across the country as results trickled out.

Some analysts said reasons for PML's defeat ranged from Musharraf's unpopularity to resentment over inflation, food shortages and power cuts.

Pakistan's main stock market welcomed the peaceful polls and absence of rigging complaints, and shares rose more than 3 percent. But dealers said the formation of a parliament hostile to Musharraf would make investors nervous.

Monday's vote was postponed from January 8 after Bhutto was assassinated in a suicide attack on December 27, which raised concern about the nuclear-armed country's stability.

The PPP, led by Bhutto's widower, Asif Ali Zardari, had been expected to reap a sympathy vote, while Sharif's party is doing surprisingly well despite a mixed record as prime minister, when he clashed with the judiciary.

His defiance of old foe Musharraf and support for the judges he purged had paid off, analysts said.

As president, former army chief Musharraf did not contest the elections, aimed at completing a transition to civilian rule, but the outcome could seal his fate.

A hostile parliament could try to remove Musharraf, who took power as a general in a 1999 coup and emerged as a crucial U.S. ally in a war on terror that most Pakistanis think is Washington's, not theirs.

COALITION QUESTIONS

Analysts said the implications for a president whose popularity slumped after he imposed emergency rule and purged the judiciary last year were ominous.

It's the moment of truth for the president, said Abbas Nasir, editor of the Dawn newspaper. There will be thoughts swirling in his mind, whether he can forge a working relationship with two parties whose leadership he kept out of the country.

A victory for Sharif, who has repeatedly called for Musharraf's removal, or the inclusion of his party in a coalition with the PPP would be disastrous for the president.

Some analysts said differences between the PPP and Sharif's party made a coalition doubtful.

Increasingly isolated, Musharraf allowed Bhutto to return from eight years in self-exile, and reluctantly let Sharif, the prime minister he overthrew come back from exile in late November. Sharif was promptly barred from standing in the polls.

At least 20 people were killed in election violence, including, Zardari said, 15 PPP activists.

But that was not as bad as feared after a bloody campaign.

Opposition concerns about rampant rigging by Musharraf's supporters also proved unfounded.

An election watchdog group put turnout at 35 percent.

A secular ethnic Pashtun nationalist party was winning in North West Frontier Province, beating Islamists who won in 2002.

Pakistan