"The people of Pakistan are totally opposed to the plans of General Musharraf to construct the Kalabagh Dam," said Raza Rabbani, opposition leader in the Senate, the upper house of the parliament, told the protesters.

"This rally will prove to be the last nail in the coffin of General Musharraf," he said. The rally was peaceful.

Water has long been a sensitive and divisive issue in drought-prone Pakistan and Musharraf is facing opposition from downstream of the proposed dam, in particular from Sindh, where people fear it will rob them of their fair share of water.

He says the dam, near the border of the Northwest Frontier and Punjab provinces in central Pakistan, would harness the Indus to the benefit of farmers across the country as well as producing hydro-electric power and controlling floods.

But opponents from Sindh, as well as North West Frontier and Baluchistan provinces, say it is only Punjab, the country's cotton and wheat basket and its most populous - and traditionally most powerful - province that will benefit.

The controversy has renewed old tension between the smaller provinces and long-dominant Punjab, analysts say.

Successive governments have been forced to shelve plans for constructing the controversial dam, which was first proposed in 1953.

Undeterred by the opposition, including from within his ruling coalition, Musharraf was in Sindh on Thursday as part of his campaign to rally public support for the project.

"I am not here to announce a decision - I am here to talk about water reservoirs and not about one dam - I am for taking people along and developing a consensus," he told a rally in the town of Sukkur, the state APP news agency reported.

"I shall speak the truth - please examine it coolly and realistically," he said.

Musharraf said the government would extend constitutional and administrative guarantees to safeguard interests of Sindh after the dam was built.