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LAHORE, PAKISTAN — Police lifted the house arrest of opposition leader Benazir Bhutto, officials said today, hours before the arrival of a senior U.S. envoy who was expected to urge the country’s military leader to end emergency rule.

The move came after Bhutto – while still confined to a Lahore residence – urged fellow opposition leaders to join her in forming an alliance to govern until elections.

Despite Bhutto’s call, President Gen. Pervez Musharraf has given no sign he will hand over power. He has named his own interim prime minister and was expected to announce today a caretaker Cabinet to oversee parliamentary elections promised by Jan. 9.

“The government has withdrawn the detention order,” Zahid Abbas, a senior police official, said near the barricaded house where Bhutto has been confined for three days.

Political unrest deepened Thursday as one of the country’s main Islamist parties called its first protests for today against the state of emergency, adding the voice of factions opposed to Musharraf’s alliance with the U.S. to the recent protests by lawyers, students and secular parties against military rule.

Also Thursday, two children and an adult were killed during a gun battle between police and protesters in Karachi – the first deaths during demonstrations since Musharraf suspended the constitution Nov. 3. Protests were reported in other cities, and more activists were arrested.

Bhutto outlined her plan for opposition factions to form a unity interim government that could supplant Musharraf’s administration during a phone interview, and the idea was quickly supported by her longtime political rival, Nawaz Sharif.

But Sharif said they weren’t in a position to form an acting government unless Musharraf was removed from office.

Sharif, who like Bhutto is a former prime minister, said the opposition’s priority should be reinstatement of Supreme Court judges removed by Musharraf. Independent-minded judges blocked some of his moves this year, and many people suspect Musharraf feared the court would overturn his re-election as president.

Deputy Secretary of State John Negroponte, on his way to Pakistan to underline U.S. demands that emergency law be lifted, said the democratic process here has been “derailed.”

“Our message is that we want to work with the government and people of Pakistan and the political actors in Pakistan to put the political process back on track as soon as possible,” Negroponte said.

Reflecting a view in Washington that Musharraf may not be able to hold on to power, U.S. officials have been referring broadly to “the Pakistani leadership” and contacting other senior military leaders.

Musharraf appointed loyalist Mohammedmian Soomro, the Senate chairman, as interim prime minister Thursday to head a caretaker government to oversee the elections. The move was necessary because Thursday marked the end of the current parliament’s five-year term.

Soomro’s appointment could strengthen skepticism about Musharraf’s assertions that the elections will be free and fair, and observers were watching to see whether the acting Cabinet ministers to be announced today were also loyalists.

A union between Bhutto and Sharif – the man Musharraf ousted in a 1999 coup – would undoubtedly turn the heat up for the general, who has so far been successful in keeping opposition factions divided.

Bhutto was visited Thursday by Bryan Hunt, the U.S. consul-general in Lahore.

“He came to find out whether I could work with Gen. Musharraf, and I told him that it was very difficult to work with someone who, instead of taking us toward democracy, took us back toward military dictatorship,” she said.

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