The two main opposition parties that won Pakistan's elections announced Thursday they would work to form a government, further isolating President Pervez Musharraf, the United States' favored ally. "We have agreed on a common agenda. We will work together to form a government together," Nawaz Sharif, the head of the Pakistan Muslim League-N, announced in English -- a gesture intended for an international audience -- at a news conference with PPP Co-Chairman Asif Ali Zardari, the widower of assassinated former Prime Minister Benazir Bhutto.


The deal between the secular groups, which tussled over power for a decade before Musharraf seized control in a 1999 coup, marks an important step toward setting up a civilian administration after years of military rule.


The PPP won the largest bloc of seats -- but not a majority -- in Monday's polling for the 342-member National Assembly. Sharif's party finished second.


Neither Sharif nor Zardari mentioned whether he'd agreed to push for Musharraf's resignation. Musharraf, whom President Bush has called an "indispensable ally" in the war on terror, has said he has no intention of resigning and will serve out his five-year term.


The two agreed to reinstate former Chief Justice Iftikhar Chaudhry and 60 other independent-minded Supreme Court and Superior Court judges, but would leave it to parliament to sort out the details. The move was a direct challenge to Musharraf, who fired the judges in November to prevent them from overturning constitutional changes -- including one to extend his term -- that he decreed.


Among the other top priorities the new government will need to address:

How to fight extremists. Both opposition parties have considered negotiating with the extremists rather then relying on military force.

Who killed Bhutto: Zardari said the new government will ask the United Nations for help in uncovering who was behind his wife's killing. U.S. and Pakistani officials have accused Taliban leader Baitullah Mehsud, but many Pakistanis suspect Pakistani intelligence services may have been involved.


More talks lie ahead before the coalition's final composition is determined and a candidate for prime minister is put forward. The new government is expected to be installed by mid-March.