ISLAMABAD, Pakistan - The resignation of Pakistan's two most powerful men paves the way for fresh polls - and revives Benazir Bhutto's chance at a political comeback.

The feuding President Ghulam Ishaq Khan and Prime Minister Nawaz Sharif resigned almost simultaneously yesterday, ending a five-month political deadlock that has paralyzed the country.

Sharif also dissolved parliament, and elections for the lawmaking lower house of parliament were expected Oct. 6. The legislatures of Pakistan's four provinces also were dissolved and elections set for Oct. 9. Presidential elections were expected in the autumn.

Former World Bank executive Moeen Qureshi was sworn in as a caretaker prime minister to oversee the elections. Sharif's term would have expired in 1995.

The presidency was turned over to the Senate chairman, Wasim Sajjad. Ishaq Khan's term would have expired in November.

Before resigning, Ishaq Khan appointed retired generals and judges to run the provinces until the elections.

The decision of Sharif and Ishaq Khan to step down was seen as a concession to the army, which has become increasingly troubled by the pair's feud. The military has ruled Pakistan for 25 of its 47 years of independence.

Bhutto, who has been out of power since Ishaq Khan sacked her government in 1990 on charges of corruption and political ineptitude, has been waiting for a chance to return.

She joined the president in April in a bid to oust Sharif, hoping for early elections and a shortcut back to power. But the Supreme Court overturned the decision and reinstated him, dashing Bhutto's hopes.

Those hopes were revived yesterday.

"I congratulate the people of Pakistan for this great victory," said a jubilant Bhutto. "Corruption and economic mismanagement have been the main cause of Nawaz Sharif's downfall."

Bhutto's plans to lead a march on the capital last week were seen by most people as the catalyst that pressed the army into pushing for the resignations. Bhutto agreed to cancel the march at the request of the army.

It's not clear how Bhutto will fare in elections. Her alliance with the president drew biting criticism from some members of her left-leaning Pakistan People's Party, and divided its ranks.

The party is seen as the leading contender in the elections. Yet few people expect she can muster a majority, opening the possibility of a hung parliament and more political paralysis.

Bhutto is demanding electoral reform and constitutional changes that would distribute the power among the prime minister, president and opposition leader. She had accused Sharif of ruling the country like a dictator and of trying to consolidate his power.