Pakistan's beleaguered President Pervez Musharraf was holding a meeting of aides and political allies on Thursday to consider declaring emergency rule.
The streets of Islamabad were calm despite overnight reports that Musharraf was poised to take a step that would probably delay elections due by the turn of the year and could result in restrictions on rights of assembly and place curbs on the media.
The government could justify emergency rule by citing mounting insecurity after a spate of attacks -- many of them suicide bombings -- by Islamist militants allied to the Taliban and al Qaeda over the past month.
General Musharraf, a staunch US ally, is going through his toughest period since coming to power in a 1999 coup.
Analysts and opposition leaders fear he might resort to an emergency because of constitutional difficulties he faces getting re-elected by the sitting assemblies while still army chief, and to stave off parliamentary elections due by the turn of the year.
"Imposition of an emergency would not lead to stability and, therefore, I hope that such a big step would not be taken," former prime minister Benazir Bhutto, the self-exiled leader of the largest opposition party, told Geo News overnight.
Nasim Zehra, a respected political analyst, said Musharraf would risk his political future if he chose emergency rule.
"Unless Musharraf makes a U-turn or there is no consequential political response, the die is cast for more conflict that could lead to Musharraf going home," Zehra said.
Bhutto said Chaudhry Shujaat Hussain, president of the ruling Pakistan Muslim League, a party with most to lose if elections go ahead, had advocated declaring an emergency for some time.
Hussain was one of political allies Musharraf called for a meeting at his army camp office in Rawalpindi, the garrison town next door to Islamabad, on Thursday morning.
While one member of the inner circle of the Pakistani leadership told Reuters that an emergency would almost certainly be imposed, another said Musharraf and his advisers wanted to take stock of the reaction before taking action.
A spokesman said nothing had been finalized.
"All options are open to the government," Deputy Information Minister Tariq Azim Khan told Reuters.
Khan said the measure could be warranted by the deteriorating security situation in tribal areas and North West Frontier Province and suggestions by US politicians that America should be prepared to strike inside Pakistani territory if it possessed actionable intelligence on al Qaeda or Taliban targets.
The United States has put Musharraf under pressure to act against al Qaeda nests in tribal regions on the Afghan border.
Western countries with troops in Afghanistan are sensitive to any instability in nuclear-armed Pakistan, whose help is crucial to fighting the Taliban insurgency and in counter-terrorism operations against al Qaeda.
Musharraf cancelled plans to join Afghan President Hamid Karzai in Kabul on Thursday at a traditional council of Afghan and Pakistani leaders.
Mohammad Abdullah, an Islamabad college student, spoke of the sense of foreboding spreading throughout Pakistan as he bought a newspaper warning of an impending emergency, though the streets of the capital appeared normal, with no extra security evident.
"People already have a sense of insecurity and any such step would make them feel more unsafe and insecure," Abdullah said.
However, the Karachi stock market, which had shrugged off political uncertainties for weeks as it hovered near life highs, slumped by more than four percent within minutes of opening.
Musharraf had planned to get re-elected in uniform between mid-September and mid-October before national and provincial assemblies are dissolved for parliamentary elections due in December or January.
Although Musharraf commands a simple majority needed to win re-election in the assemblies, he is likely to face multiple constitutional challenges.
The Supreme Court's momentous decision on July 20 to reinstate a chief justice who Musharraf had spent four months trying to sack has heightened expectations that those challenges could well be upheld.
He has tried to negotiate a power-sharing agreement with Bhutto, but she has said there can be no deal unless he quits the army and holds free and fair elections.
The Supreme Court also began hearing a plea on Thursday for Nawaz Sharif, the prime minister Musharraf ousted eight years ago, to be allowed to return from exile.