Pakistan President Musharraf’s days in uniform and in power appear to be numbered. The bloody showdown at the Lal Masjid (Red Mosque), the suicide bombings in the capital Islamabad, the popular support for the chief justice, and the rising discontent with the general’s writ all point to the end of this phase of military rule.

There’s no doubt the size of the crisis, or else the president would not have held talks with a sworn enemy: former prime minister Benazir Bhutto. Civil rights lawyers and Islamists are now too consenting bedfellows. Power is being negotiated between the courts, parliament, barracks and mosque.

What is being worked out now in Pakistan, sometimes smoothly but mostly chaotically, is an internal consensus on governance. There’s no doubt that a military government in Pakistan can find political partners from its opponents to legitimise itself again. Delhi remains silent on this process, knowing its intervention will only make matters worse.

The paradox for the world’s biggest democracy is that this military dictator remains the best bet for peace in the region. While the rugged ranges of the Afghan border remain in the west’s sights, Pakistan’s “core issue” is the disputed Himalayan territory of Kashmir.

India and Musharraf’s Pakistan are close enough to do a deal. The outline of a solution is well-known, revolving around demilitarisation, self-governance and joint management along both sides of the de facto border.

The problem is one of trust. Pakistan has not shut down its anti-Indian militant organisations and the Indian Army remains entrenched. The Indian government concedes that jihadi infiltration from Pakistani Kashmir has dropped and the Indian state has been noticeably quieter in the past few months. But there’s no rush in New Delhi for conflict resolution.

Bizarrely, it has been the military leader who has been in a hurry to make peace, while the hawks have circled in democratic Delhi. India snubbed Musharraf’s public suggestion to cut troop numbers in Kashmir Valley, even though it has been a demand of a local ally of the ruling Congress party. Delhi is being difficult over a coordinated withdrawal from the world’s highest battlefield, the Siachen glacier. Troops eyeball each other over a vast snowfield.

India is aware Musharraf can deliver some kind of peace. Soldiers in Pakistan distrust politicians’ abilities to safeguard the national interest. So Musharraf, as army chief, sabotaged the then prime minister Nawaz Sharif’s peace overtures to India in the late 90s. The Pakistani army thinks only it can make a deal with India that nobody could renege on.

The counter argument is that any settlement would lack popular legitimacy, but the unpleasant reality is that politicians in Pakistan are often servants rather than masters. Ms Bhutto is unlikely to be able to control Pakistan’s spies, the Inter-Services Intelligence agency, which is now attempting to disarm and destroy militants it once created and used. She may also face a new army chief, unwilling for long to listen to the democrats.

This is not to say Ms Bhutto would not try to do the right thing. But her alleged closeness with India and the “betrayal” of Sikh militants operating from Pakistan helped her to get dismissed as prime minister in 1990. Navigating these murky waters is a lesson Ms Bhutto has never forgotten. When she returned to office in 1993, as a matter of survival, it was with a harder anti-India line.

All this is compounded by the rise of the Islamic parties, who are now at the forefront of the campaign to unseat Musharraf. These politician-priests are essentially democrats, albeit reluctant compromisers.

The jihadists are not. They were allowed to flourish during the Soviet invasion of Afghanistan but now target US and European troops. These groups of mystical fanatics pose a serious threat to Pakistan’s internal security.

Musharraf held the view that it took a diamond to cut a diamond: you needed commandos to deal with “terrorists”. Although it was Washington that demanded search-and-destroy operations, India benefited. Musharraf, for his troubles, became a marked man. Toppled from power, the odds are short on his survival.

The United States is also keen on peace between India and Pakistan. It rightly worries that a near-war between the two neighbours could suddenly turn nuclear. But Washington’s real concern is that the Pakistani army’s strength to deal with al-Qaeda would be sapped if soldiers were diverted from the Afghan border to the Indian one.

A new leader could still do a deal with India. There’s no reason democracy cannot take root in Pakistan. It might take time, especially if there is no orderly transition. And messy indigenous politics may produce a less westernised, social liberal than Musharraf to deal with. Gone, for a while at least, would be the talk of an India-Pakistan treaty of peace, friendship and cooperation, or that gas from Iran could flow through Pakistan to India. Worse still, blood may once again run over the mountains of Kashmir.