Major U.S. Ally Pakistan President Pervez Musharraf Resigns

ISLAMABAD, Pakistan, Aug. 18, 2008— -- Pervez Musharraf, the former military general who became Pakistan's president and accepted more than $10 billion in aid from the United States to fight the war on terror, resigned in a speech broadcast to the nation today, saying the country would benefit from his stepping aside before impeachment proceedings against him could begin.

"Can the country face more confrontation? Can the country's economy face more destruction?" Musharraf asked during an hour-long address carried live on all Pakistani channels and on Western cable channels. "The honor and dignity of the country will be affected, and in my view, the honor of the office of president will also be affected."

"Therefore, after taking everything into consideration," he continued, "I am resigning from the presidency."

Musharraf took power in 1999 after a bloodless coup, and between that time and early 2007, he received nearly 70 percent approval ratings. But in the last year, he fired the Supreme Court chief justice and imposed emergency rule as the economy dropped and inflation spiked. Today, inflation is running higher than 24 percent, and more than six in 10 Pakistanis wanted to see him go, according to a recent Pakistani Gallup poll.

"We are facing calamity. Everything is expensive. Behind the government is his hand," 20-year-old Adnan Abbasi told ABC News while shopping in an Islamabad market. "When he goes, there will be a new government, and prices will go down."

U.S. Secretary of State Condoleezza Rice said in a statement today that "President Musharraf has been a friend to the United States and one of the world's most committed partners in the war against terrorism and extremism. Musharraf made the critical choice to join the fight against al Qaeda, the Taliban and other extremist groups that threaten the peace and security of Pakistan, its neighbors and partners throughout the world. For this, he has our deep gratitude."