The body of Pakistan opposition leader Benazir Bhutto arrived in her family village for burial on Friday, hours after her assassination plunged the nuclear-armed country into one of the worst crises in its 60-year history.

Her killing on Thursday after an election rally in the city of Rawalpindi triggered a wave of violence, especially in her native Sindh province, and stoked fears that a Jan. 8 election meant to return Pakistan to civilian rule could be put off.

World leaders urged Pakistan not to be deflected from a course toward democracy, as fears of further instability in a region racked by Islamist militancy roiled markets on Friday and triggered a flight to less risky assets such as bonds and gold.

"Unrest in Pakistan is eroding the market sentiment dramatically as Pakistan, unlike North Korea or Iran, is known to really have nuclear weapons," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

Thousands of mourners thronged Bhutto's ancestral home as the former prime minister's body arrived aboard a military aircraft, accompanied by husband Asif Ali Zardari and their three children.

People cried and wailed as Bhutto's coffin was taken to her family home by ambulance.

"Show patience. Give us courage to bear this loss," Zardari urged mourners as the coffin was borne into the house.

Bhutto, 54, had hoped the huge popular following she enjoyed among the Pakistani poor would propel her to power for the third time in an election meant to stabilise a country struggling to contain Islamist violence.

But as she left the campaign rally, where she had spoken of threats to her life, she stood to wave to supporters from the sun-roof of her bullet-proof vehicle. An attacker fired shots at her before blowing himself up, police and witnesses said.

She was pronounced dead in hospital in Rawalpindi, home of the Pakistan army and the city where her father, former prime minister Zulfikar Ali Bhutto, was hanged in 1979 after being deposed by a military coup.

"It is the act of those who want Pakistan to disintegrate," said Farzana Raja, a senior official from Bhutto's Pakistan People's Party. "They have finished the Bhutto family."    

Across Pakistan, a country used to political violence and ruled by the military for more than half of its life, friends and foes alike were stunned by the death of a woman many had once criticised as a feudal leader buoyed by popular support while enjoying the riches of the family dynasty.

"People are very angry. They attacked banks and government offices. There were no police anywhere. Two shops selling weapons were also looted," said Larkana-based journalist Maula Baksh.

At least four people were killed in Karachi, capital of Sindh, in violence that erupted following her slaying. On Friday unidentified gunmen shot dead a police constable in the city.

Former prime minister Nawaz Sharif, Bhutto's old political rival, said his party would boycott the January election.

He blamed President Pervez Musharraf, who seized power in a military coup in 1999 but recently retired from the army, for creating instability. "Free elections are not possible ... Musharraf is the root cause of all problems," he said.

Musharraf imposed a state of emergency in November in what was seen as an attempt to stop the judiciary from vetoing his re-election as president. He lifted emergency rule this month.

In Karachi, thousands poured on to the streets on Thursday night to protest. Violence eased towards midnight after dozens of vehicles and several buildings were torched.

A Reuters reporter travelling through Sindh said on Friday he had seen hundreds of burnt-out vehicles, and people were coming out and setting fire to more and trying to block roads.

Authorities ordered the central bank and all schools to close for three days of mourning.