ISLAMABAD (Reuters) - Pakistan's year-old civilian government sought a compromise to appease opposition leaders and a lawyers movement on Friday as police detained hundreds of activists in a bid to stifle a nationwide protest.

The protest by lawyers and opposition parties for an independent judiciary threatens to bring political turmoil and comes as President Asif Ali Zardari's government is struggling to check rising Islamist militancy and to revive a sinking economy.

Under a compromise Prime Minister Yousaf Raza Gilani is pushing, Zardari has agreed to yield ground to opposition demands, according to a presidential aide, speaking on condition of anonymity.

Zardari is considering ending central government rule in the central province of Punjab to let the provincial assembly choose the next chief minister.

The imposition of central rule and removal of a Punjab government led by an opposition party last month were key triggers in the current crisis.

But the main demand of protesters is the reinstatement of former Supreme Court chief justice Iftikhar Chaudhry, who was dismissed in 2007 by the then president and army chief Pervez Musharraf.

Zardari has refused to reinstate the judge, seeing him as a threat to his own position, but the presidential aide said under the proposed compromise a constitutional court and an appellate court would be set up and Chaudhry would head one.

The question is whether that will satisfy opposition leader Nawaz Sharif. The former prime minister, who has thrown his weight behind the lawyers' movement, wants Chaudhry to be chief justice again.

He should be restored, independence of judiciary should be restored, Sharif told Geo News Channel.

A senior politician privy to the negotiations said the next 48 hours were crucial: It will be make or break.

Black-suited lawyers and flag-waving opposition activists launched a so-called long march from the cities of Karachi and Quetta on Thursday, and aim to reach Islamabad on Monday.

The government has tried to foil the protest with detentions, bans on rallies, and road blocks, while at the same time looking for a way to avert a showdown that could become violent.

SKIRMISHES, PROTEST LEADERS ARRESTED

Pakistan's efforts to eliminate Taliban and al Qaeda enclaves on the Afghan border are vital to U.S. plans to stabilize Afghanistan and defeat al Qaeda. The last thing the United States wants to see is Pakistan consumed by turmoil.

If the crisis gets out of hand, the army, which has ruled for more than half the country's 61 years of history, could feel compelled to intervene in some way, though most analysts say a military takeover is highly unlikely.

Army chief General Ashfaq Kayani, an avowed constitutionalist, met both Zardari and Gilani on Friday.

Several leaders of the protest in Karachi were arrested during skirmishes when the procession reached the outskirts.

The convoy that left Quetta was also blocked, although protest organizers said they were determined to get to the capital, where they plan a sit-in outside parliament.

Some 800 activists were detained in the key central province of Punjab, an official said, while dozens more were held in Peshawar, the main city in the northwest.

Zardari spoke by telephone with the U.S. special envoy to Pakistan and Afghanistan, Richard Holbrooke, and Ambassador Anne Patterson for 30 minutes on Thursday, Zardari's office said.

State Department spokesman Robert Wood said the United States wanted to stress that violence should be avoided, the rule of law respected and that there should be no impediments to peaceful, democratic activities.

OTHER CONCESSIONS

The crisis erupted late last month when the Supreme Court barring Nawaz Sharif and his brother, Shahbaz, from holding elected office, and by Zardari ejecting the Sharif's party from power in Punjab and imposing central rule.

Under the proposed compromise, Shahbaz Sharif, who until the court ruling was chief minister of Punjab, the most populous and most influential of Pakistan's four provinces, would be granted an appeal against the court ruling, the presidential aide said, and the province's assembly would choose a chief minister.

It was also proposed that Zardari would live up to a promise to let go of some of the sweeping presidential powers established by Musharraf, and a constitutional reform package would be introduced in parliament.

These are all the things being discussed, but nothing is 100 percent yet, said the presidential aide.

(Additional reporting by Augustine Anthony and Zeeshan Haider; Editing by Paul Tait)

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