Pressure mounts on Pakistan's Zardari to quit

ISLAMABAD (Reuters) - Pressure mounted on Thursday for Pakistan's President Asif Ali Zardari to resign after a court struck down an amnesty protecting him and other politicians from possible prosecution for corruption.

The prospect of political turmoil comes as the United States increases calls on Pakistan to tackle Afghan Taliban in lawless border enclaves, where Pakistani security agents said suspected U.S. drones attacked on Thursday, killing 12 fighters.

The Supreme Court threw out on Wednesday the 2007 amnesty that protected Zardari and top aides from graft charges, heaping pressure on the unpopular pro-American leader, even though he is still shielded by presidential immunity.

The ruling means all old cases covered by the amnesty, most of them corruption cases, have been revived. It also asked the government to seek the revival of cases lodged in foreign countries.

The United States is struggling to stabilize Afghanistan and needs Pakistani action against militants in its northwest, and will be dismayed if political turmoil absorbs the government's attention.

Immediately after the Wednesday evening court ruling, Zardari's spokesmen said the president's ruling Pakistan People's Party (PPP) respected the decision but there was no question of the president resigning.

However, a senior leader of the main opposition party said Zardari should do the right thing and step down.

"He should quit this office in his own interest as well as in the interest of his party and the system. He can get any member of his party elected to the post," said Khawaja Mohammad Asif of the Pakistan Muslim League (Nawaz) party.

"He will achieve the high moral ground," he said.

Stock investors have been unnerved by both political uncertainty and militant violence and the main index ended 0.29 percent down at 9,227.18 in thin turnover.

Some legal experts say the danger for the president is that the legitimacy of his 2008 election as president could be challenged now that old cases against him have been revived.

Among those protected by the amnesty were the interior and defense ministers and several of Zardari's top aides.

If they departed from government it would not have a significant impact on Pakistan's war on militancy, which is led by the army.

DRONE STRIKE

Pakistani security officials said suspected U.S. drone aircraft fired seven missiles at militants in the North Waziristan region, killing 12 fighters.

"Seven missiles were fired. They hit a cave complex, a compound and a vehicle," said one of the Pakistani officials, who declined to be identified.

There was no information about the identity of those killed but North Waziristan is a sanctuary for an Afghan Taliban faction led by veteran militant commander Jalaluddin Haqqani, and for al Qaeda fighters.

The United States has launched 48 drone strikes this year, killing more than 400 people, most of them militants, according to a Reuters tally. There were 32 such strikes last year which killed about 240 people.

Though attacking its homegrown Taliban behind a wave of bomb attacks, Pakistan is resisting U.S. pressure to crack down on Afghan Taliban militants, who could provide it with leverage against the growing influence of old rival India in Afghanistan.

President Barack Obama has made clear Washington had other options if Pakistan did not cooperate in fighting Afghan Taliban.

Those options include increased drone attacks.

TARNISHED IMAGE

In Islamabad, a spokesman for the government's anti-graft agency said arrest warrants against some people had been revived and some people had had their assets frozen.

About 248 people had also been barred from leaving the country, said agency spokesman Ghazni Khan. He gave no names.

The amnesty was introduced by former president Pervez Musharraf as part of a power-sharing deal brokered with Zardari's late wife, former prime minister Benazir Bhutto, with U.S. and British encouragement.

Bhutto returned to Pakistan from self-imposed exile soon after the amnesty was introduced, but was assassinated weeks later while campaigning for a general election she hoped to win.

Instead, Zardari led her party to victory in the February 2008 polls and became president after Musharraf stepped down later that year.

But Zardari's image has long been tarnished by allegedly shady deals during Bhutto's two terms as prime minister in the 1990s.

Zardari says the charges were politically motivated. He has never been convicted but nevertheless spent 11 years in jail.

In another ominous development for the president, the Supreme Court ordered the government to inform Swiss authorities a case against him there may be reopened.

Swiss judicial authorities said in August 2008 they had closed a money-laundering case against Zardari and had released $60 million frozen in Swiss accounts for a decade, soon after Pakistan dropped out of all cases it had initiated there.

(Writing by Robert Birsel; Editing by Jerry Norton)

(For more Reuters coverage of Afghanistan and Pakistan, see: here)