Under the deal, Pakistan People's Party will first support the Musharraf's re-election by the present assemblies which will be endorsed by the new houses after the general elections, The Daily Times reported.
In return, the National Accountability Bureau, which was pursuing a host of corruption cases against Bhutto and her spouse Asif Ali Zardari in Swiss courts, would drop them, it said.
According to the report, the emissaries of the two leaders gave the finalised draft of the deal on Sunday night after four rounds of talks held in Dubai and Islamabad in less than a week. A close relative of Benazir is said to be brokering the deal on her behalf, while a six-member team, headed by Tariq Aziz, National Security Council Secretary and top aide of the President, represented Musharraf at the talks.
Bhutto's close associate and PPP leader Makhdoom Amin Fahim was also involved in the talks, it said. During the fresh round of talks in Dubai last Friday and Saturday, the president's uniform that is his continuation as Army Chief remained the bone of contention.
However, the president's team assured Bhutto of "flexibility" on the issue if she did the same, the report said.
Before leaving for Dubai, the government team met with Benazir's emissaries at Fahim's farmhouse in Chak Shahzad in Islamabad. PPP spokesman Fratullah Babar, however, denied the report saying that party's principle stand was that it would not endorse Musharraf as President in uniform.
"We stand by that and there is no change in that," he told PTI in Islamabad on Tuesday while reacting to the newspaper story. It is part of the misinformation campaign by the government against Benazir, Babar said. Meanwhile, Pakistan's Information Minister Muhammad Ali Durrani said Bhutto was "begging" for a deal from President Pervez Musharraf and the PML government.
Addressing a public rally in Kohat, Durrani said that contrary to her claims for the last seven years that she won't back Musharraf, Bhutto was now convinced that Musharraf's development agenda had nationwide support.
Durrani said the, "...doors of the East have been shut on those who are looking towards the West" for acquiring power. "We will not strike a deal with people who compromise national honour to foreigners," he said.
Commenting on Minister of Railways Sheikh Rashid's claim that the PPP was close to a deal with the government, Durrani told a private television channel it was Rashid's personal opinion.