Pakistani opposition leader Benazir Bhutto was assassinated in a suicide attack today as she drove away from a campaign rally just minutes after addressing thousands of supporters.

The death of the charismatic former prime minister threw the campaign for the 8 January election into chaos and stirred fears of mass protests and a wave of violence that had already erupted by the evening. President Pervez Musharraf blamed Islamic terrorists for the killing.

"This is the work of those terrorists with whom we are engaged in war," he said in a nationally televised speech. "Today, after this tragic incident, I want to express my firm resolve ... we will not rest until we eliminate these terrorists and root them out."

Bhutto's death left a void at the top of her Pakistan People's Party, the largest political group in the country, and threw into turmoil US President George W Bush's plan to bring stability to this key US ally by reconciling her and Musharraf.

Speaking to reporters at his ranch in Crawford, Texas, a tense-looking Bush condemned the killing and demanded that "those who committed this crime must be brought to justice."

Musharraf convened an emergency meeting with his senior staff, where they were expected to discuss whether to postpone the election, an official at the Interior Ministry said, speaking on condition of anonymity because of the sensitivity of the talks. He also announced three days of mourning for Bhutto.

Next to Musharraf, Bhutto, 54, was the best known political figure in the country, serving two terms as prime minister between 1988 and 1996. She was respected in the West for her liberal outlook and determination to combat the spread of Islamic extremism, a theme she returned to often in her campaign speeches.

As news of her death spread, supporters at the hospital in Rawalpindi smashed glass doors and stoned cars. Many chanted slogans against Musharraf, accusing him of complicity in her killing.

In Karachi, shop owners quickly closed their businesses as protesters set tires on fire on the roads, torched several vehicles and burned a gas station, said Fayyaz Leghri, a local police official. Gunmen shot and wounded two police officers, he said.

One man was killed in a shootout between police and protesters in Tando Allahyar, a town 120 miles north of Karachi, said Mayor Kanwar Naveed. In the town of Tando Jam, protesters forced passengers to get out of a train and then set it on fire.

Violence also broke out in Lahore, Multan, Peshawar and many other parts of Pakistan, where Bhutto's supporters burned banks, state-run grocery stores and private shops. Some set fire to election offices for the ruling party, according to Pakistani media.

Akhtar Zamin, home minister for the southern Sindh province, said authorities would deploy troops to stop violence if needed.

Nawaz Sharif, another former premier and leader of a rival opposition party, rushed to the hospital and addressed the crowd.

"Benazir Bhutto was also my sister, and I will be with you to take the revenge for her death," he said. "Don't feel alone. I am with you. We will take the revenge on the rulers."

Speaking to the BBC, Sharif also questioned whether to hold the elections.

"I think perhaps none of us is inclined to think of the elections," he said. "We would have to sit down and take a very serious look at the current situation together with the People's Party and see what we have to do in the coming days."

Afghan President Hamid Karzai, who met with Bhutto just hours before her death, called her a brave woman with a clear vision "for her own country, for Afghanistan and for the region — a vision of democracy and prosperity and peace."

Suspicion for the blast fell on resurgent Islamic militants linked to al Qaida and the Taliban who hated Bhutto for her close ties to the US and her support for the war on terror. A local Taliban leader reportedly threatened to greet Bhutto's return to the country in October with suicide bombings.

The attacker struck as Bhutto was leaving a rally of thousands of supporters in the garrison city of Rawalpindi.

"She was inside the vehicle and was coming out from the gate after addressing the rally when some of the youths started chanting slogans in her favour," said Sardar Qamar Hayyat, a leader from Bhutto's party who was about 10 yards away. "Then I saw a smiling Bhutto emerging from the vehicle's roof and responding to their slogans."

"Then I saw a thin, young man jumping toward her vehicle from the back and opening fire. Moments later, I saw her speeding vehicle going away. That was the time when I heard a blast and fell down," Hayyat said.

At least 20 others were killed in the blast, an Associated Press reporter at the scene saw.

Bhutto was rushed to the hospital and taken into emergency surgery.

A doctor on the team that attended to Bhutto said she had a bullet in the back of the neck that damaged her spinal cord before exiting from the side of her head. Another bullet pierced the back of her shoulder and came out through her chest, he said on condition of anonymity because he was not authorised to speak to the media. She was given an open heart massage, but the main cause of death was damage to her spinal cord, he said.

"At 6.16 pm she expired," said Wasif Ali Khan, a member of Bhutto's party who was at Rawalpindi General Hospital.

Senator Babar Awan, Bhutto's lawyer, said, "The surgeons confirmed that she has been martyred."

Bhutto's supporters at the hospital exploded in anger, smashing the glass door at the main entrance of the emergency unit. Others burst into tears. One man with a flag of Pakistan People's Party tied around his head was beating his chest.

"I saw her with my own eyes sitting in a vehicle after addressing the rally. Then, I heard an explosion," said Tahir Mahmood, 55, as she sobbed. "I am in shock. I cannot believe that she is dead," he said.

Some at the hospital began chanting, "Killer, Killer, Musharraf." A few began stoning cars outside.

"We repeatedly informed the government to provide her proper security and appropriate equipment including jammers, but they paid no heed to our requests," Malik said.

Bhutto had returned to Pakistan from an eight-year exile on 18 October. Her homecoming parade in Karachi was also targeted by a suicide attacker, killing more than 140 people. On that occasion she narrowly escaped injury.

Bhutto was killed just a few miles from the scene of her father's violent death 28 years earlier. Zulfikar Ali Bhutto, a former prime minister and the founder of the party that his daughter would later lead, was executed by hanging in 1979 in Rawalpindi on charges of conspiracy to murder that supporters said was politically motivated by the then-military regime. His killing led to violent protests across the country.

As Bhutto addressed the rally today, she was flanked by a massive picture of her father.

Minutes later, as she drove away from the rally, the area was awash in blood.

An Associated Press reporter at the scene could see body parts and flesh scattered at the back gate of the Liaqat Bagh park where Bhutto had spoken. He counted about 20 bodies, including police, and could see many other wounded people.

Police cordoned off the street with white and red tape, and rescue workers rushed to put victims in ambulances as people wailed nearby.

The clothing of some of the victims was shredded and people put party flags over their bodies. Police caps and shoes littered the asphalt.

Today, hundreds of riot police had manned security checkpoints to guard the venue. It was Bhutto's first public meeting in Rawalpindi since she came back to the country.

In November, Bhutto had also planned a rally in the city, but Musharraf forced her to cancel it, citing security fears. In recent weeks, suicide bombers have repeatedly targeted security forces in Rawalpindi, a city near the capital where Musharraf stays and the Pakistan army has its headquarters.