Bhutto's assassination in a suicide attack on Thursday has stoked violence and thrown into doubt the January 8 election, deepening the crisis in the important U.S. ally against terrorism as it struggles to emerge from military rule.

"It seems more than likely that elections will be delayed," Tariq Azim Khan, a senior official of the Pakistan Muslim League (Q) party, told Reuters.

The party backs President Pervez Musharraf and ruled until a caretaker government was set up last month.

Khan said he expected a six to eight week postponement.

Anger against President Pervez Musharraf burns strongly among Bhutto supporters and since her death sporadic violence has erupted, boosting fears about nuclear-armed Pakistan's stability.

Pakistan's stocks are expected to tumble on Monday following the political turmoil and violence, which threaten to scare off foreign investors and damage the economy.

Karachi, Pakistan's biggest city, financial capital and main port, has been paralyzed by a spasm of street violence. Shops have been shuttered, petrol stations closed and railways attacked by angry mobs, bringing transport to a standstill.

Source: REUTERS