Speculation is rife here that former Prime Ministers Benazir Bhutto and Nawaz Sharif will bury the hatchet to form an alliance against President Pervez

Musharraf following a recent visit to Jeddah by Benazir Bhutto.

Media reports in Islamabad speculate that Benazir, who went to Mecca on Wednesday to offer prayers, also went to Jeddah, were Sharif is living in exile under an agreement between the Musharraf government and the Saudi Royal family.

Benazir's Pakistan Peoples Party (PPP) spokesman has denied that any such meeting took place, as Sharif is under obligation not to undertake any

political activity while in exile, a report published in the The News said on Friday.

The paper, however, quoted a family friend saying that Sharif and Benazir were in regular touch with each other and frequently discussed the country's fast-changing political scenario.

"They have buried the hatchet and vowed to counter the military-backed king's (Musharraf) parties in the polls through a joint strategy," the paper quoted the friend.

The News said if a meeting had taken place between the two politicians, "it could add a new dimension to the political scenario and would send positive signals to the cadres of both the parties."