Bhutto also said it was now likely her Pakistan People's Party would boycott January parliamentary elections, and indicated that she wanted to build an alliance with other opposition leaders, including former Prime Minister Nawaz Sharif, to restore democracy.
Chanting "prime minister Benazir" and "long live Bhutto," supporters of the opposition leader in Lahore were dragged off to prison today, reports CBS News correspondent Sheila MacVicar.
Police scuffled with small groups of demonstrators in the teeming southern city of Karachi. Bhutto supporters angry over her detention fired gun shots at two police stations in a poor district of the city where her Pakistan People's Party is popular, senior police officer Fayyaz Khan said. No one was hurt.
Police used tear gas to disperse several bands of protesters, he said.
But Bhutto and other opposition leaders have so far failed to ignite mass protests, adds MacVicar. The basic reason: most Pakistanis are too fearful of losing their livelihoods by risking arrest. So the calculation of diplomats and others is that without the streets on fire, Musharraf will survive.
Earlier, Bhutto told private Geo TV network that Musharraf, whom she described as a hurdle to democracy, must resign both as president and army chief. She said Musharraf's surprise declaration of an emergency and crackdown on the opposition and the judiciary meant she could no longer trust him.
"I could not serve as prime minister with Gen. Musharraf as president," she said. "I will not be able to work with Gen. Musharraf because I simply won't be able to believe anything he says to me."
Her comments appeared to bury hopes of the political rivals forming a pro-U.S. alliance against rising Islamic extremism. They had held months of talks that paved the way for Bhutto's return from exile last month to contest January parliamentary elections.
She said once she was freed from detention, she would work to forge a broad alliance, including with Sharif - a longtime rival but one who shares her wish to end military rule. Sharif was ousted by Musharraf in the 1999 coup that brought the general to power. He attempted to return to Pakistan in September but was immediately deported.
"Once I'm out, I intend to build a broad-based alliance with a one-point agenda to restore democracy," Bhutto told reporters. "I will work with all political leaders ... I will work with Nawaz Sharif.
"We may work side-by-side. The important thing is that we both believe democracy must be restored," she said.
Sharif on Tuesday welcomed Bhutto's call for Musharraf to resign and said the opposition should unite against the military ruler.
Sharif called for Bhutto and other opposition parties to work together for the restoration of top judges Musharraf ousted when he declared a state of emergency Nov. 3.
"What I'm hearing on TV, her statements today that she has cut off all her links with Pervez Musharraf and wants him to resign from both offices, I think it is a positive development and a step toward achieving the objectives of the opposition," he told The Associated Press by phone from Saudi Arabia.
CBS News White House correspondent Peter Maer reports that press secretary Dana Perino confirmed Tuesday that Deputy Secretary of State John Negroponte would be sent to Pakistan to deliver a face to face message to Musharraf that he must lift the state of emergency before national elections are held. The White House would not confirm when Negroponte would travel to Pakistan.
Despite Bhutto's threat to boycott elections, MacVicar says Western diplomats in Pakistan feel such a defiant move is unlikely.
One diplomat, speaking on the condition of anonymity, said nobody thinks Musharraf is "naïve enough" to hold elections under emergency rule and believe the West will accept them as legitimate.
Authorities mounted a massive security operation to prevent Bhutto from leading a procession to the capital, Islamabad to press for an end to the emergency that Musharraf says is needed to fight rising Islamic militancy.
Thousands of riot police blocked all roads leading to the upscale neighborhood where Bhutto was staying and police said more than 100 of her supporters had been arrested in the area Tuesday.
Eight trucks and tractors loaded with sand were parked across one street. Police stood behind the vehicles and a row of metal barricades topped with barbed wire. Reporters could not see the house of a lawmaker where Bhutto was staying because they were prevented from crossing the cordon.
Police tried to stop them at several points and had waylaid some of the cars and arrested several leaders, but the convoy was continuing southward, Qureshi said by phone.
The protest caravan is expected to take about three days, and Bhutto's party forecast that thousands of supporters would join en route.
Police initially said they ramped up security around Bhutto due to intelligence that a suicide bomber was planning to attack her in Lahore.
Bhutto was targeted by an Oct. 18 suicide attack on a homecoming procession in the southern city of Karachi as she returned from years in exile. She was unscathed, but the blast killed 145 others.
She was put under house arrest in Islamabad Friday to prevent her from addressing a rally in the nearby city of Rawalpindi, where authorities issued similar warnings.
With Musharraf losing popularity due to growing disaffection with military rule, U.S. officials encouraged him to reconcile with Bhutto in hope of keeping a U.S.-friendly administration in control of the nuclear-armed nation where militants are orchestrating attacks inside the country and across the border in Afghanistan.
Extinguishing that prospect puts further strain on Musharraf's relations with Washington, which is pressing him loudly to lift the emergency to ensure that elections are fair. It also wants him to quit his army post.
Musharraf, who took power in a 1999 coup and became a key U.S. ally in fighting al Qaeda and Taliban, has set no time limit for the emergency which has also resulted in a ban on rallies and the blacking out of independent TV networks.
He signaled Sunday that he wanted to hold the elections with the restrictions in place, raising major doubts over whether the vote could be credible.
The emergency came shortly before the Supreme Court was due to rule on the legality of Musharraf's recent re-election for a new presidential term, and critics say it was a tactic to oust independent-minded judges and prolong his eight-year rule.