The renewed political turmoil bodes ill for military action against Muslim extremists that the U.S. believes is key to success in neighboring Afghanistan, analysts said. Pakistan's powerful army could use the lack of political consensus to avoid operations that clash with its perceived strategic interests.
The crisis also all but guarantees that lawmakers will not make progress anytime soon on fixing Pakistan's deep-seated problems in areas like education, health care and infrastructure that have contributed to economic decline and rising militancy.
"There is no electricity, no gas, no jobs and they are fighting one another," said Arif Fasiullah, 35, of the central city of Multan. "They do not pass any legislation. They just do dirty politics."
Pakistan, with a population of more than 180 million, faces chronic power outages that can last up to 16 hours per day in some areas during the scorching summer, and up to a third of its people lack access to clean drinking water. Average income per capita is less than $3,000, and the average adult has fewer than five years of schooling.
The International Monetary Fund, which has provided Pakistan with billions of dollars in loans to keep its economy afloat, has demanded the country implement significant reforms, including deep cuts to its deficit. The assistance took on added importance after last year's massive floods that affected some 20 million people.
But the economic reforms, notably a revised general sales tax, are unpopular and have given the opposition and other parties a focus for their complaints.
The second-largest partner in Pakistan's governing coalition, the Muttahida Qaumi Movement, said Sunday it was joining the opposition because of fuel price hikes and the generally poor performance of the ruling Pakistan People's Party. The government announced rises in gas and heating oil prices on New Year's Eve that the MQM called a "petrol bomb" dropped on the Pakistani people.
The shift in the political landscape, which ended the coalition's majority in parliament, was not expected to lead to the fragile government's imminent collapse.
But analysts warned that Pakistan's army may use the crisis as yet another reason to delay launching an operation against militants in the country's North Waziristan tribal area who regularly attack foreign troops in Afghanistan. The U.S. believes cutting the militants off from North Waziristan and other sanctuaries inside Pakistan is critical for any sustainable victory in Afghanistan.
"It will give the army chief the excuse to say that he does not have the political consensus needed to go into North Waziristan," said Mosharraf Zaidi, an independent political analyst and columnist in Islamabad.
The army, considered the most powerful institution in Pakistan, has deflected demands for a North Waziristan operation in the past, saying its troops are stretched too thin in other areas along the Afghan border. But many analysts believe the army is reluctant to target militant groups with which it has historical ties and could be useful proxies in Afghanistan after foreign forces withdraw.
That outlook is unlikely to change regardless of which party is running the government, said Zaidi.
"There is nothing that can happen to change Pakistan's calculus," he said.
The army could not be reached for comment.
In Washington, State Department spokesman P.J. Crowley said the Obama administration is following developments but considers the situation to be a matter for the Pakistan government to work out.
"This is about internal politics within Pakistan," Crowley said, adding that Washington will continue to work with Islamabad in pursuit of common interests. He said he would not conclude that the loss of MQM in the coalition is necessarily a distraction from the struggle against extremism.
"We're focused on our long-term partnership with Pakistan," Crowley said.
The Pakistan People's Party took power in February 2008 in elections that brought Pakistan out of nearly a decade of military rule. It rode to power on a wave of sympathy after its leader, Benazir Bhutto, was assassinated.
But its popularity has slipped as Pakistan has grappled with severe economic problems and frequent militant attacks. The inflation rate in Pakistan is above 15 percent, according to government statistics, and the poorest are feeling the pain most.
The MQM withdrew from the coalition about two weeks after a smaller party, the Jamiat Ulema Islam, decided to do the same.
Without the two, Prime Minister Yousuf Raza Gilani's ruling coalition will fall about a dozen seats short of the 172 seats needed for a majority in the 342-member parliament. That means the fractured opposition parties - if they can work together - could sponsor a no-confidence vote on Gilani. A majority vote would remove Gilani from office and possibly trigger early elections.
Analysts said Gilani had only weeks, if not days, to keep his coalition intact or scrape together a new one. However, he appeared to have a bit of breathing room because it was unlikely the fragmented opposition will be able to close ranks and oust him in a no-confidence vote.
Also, neither the MQM nor the largest opposition party, the Pakistan Muslim League-N, has a real interest in bringing down the government and forcing immediate elections because they would be saddled with governing at such a difficult time, said Najam Sethi, editor of the Daily Times newspaper. Those parties would be more interested in holding early elections next year, he said.
"They want to appear before the public as custodians of the public interest by keeping the government under pressure," said Sethi.
The army, which is considered the most powerful institution in Pakistan, would also be interested in holding off on any election that would bring PML-N to power because of historical animosity between the military and the party's chief, former Prime Minister Nawaz Sharif, said Sethi.
Pakistani President Asif Ali Zardari is the head of the PPP and his position as president would likely be safe even if the party loses its majority in parliament. Analysts speculated that Zardari might be willing to replace Gilani with a prime minister more acceptable to other parties to avoid the PPP's losing power. But Zardari spokesman Farhatullah Babar said Monday the president backs Gilani and won't abandon him.
The most likely scenario in the near-term is that the PPP will make concessions to the MQM to draw them back into the coalition and avert the current crisis, said Zaidi, the analyst. The MQM is most interested in increasing its power in the southern port city of Karachi, he said.
Meanwhile, the political bickering and lack of progress have upset many Pakistanis.
Tahir Khan, 25, a laborer in the northwest city of Peshawar, said it has become harder to feed his family of six.
"I do not care what one leader says about the other. I am more concerned which leader gives us what," he said.