President Pervez Musharraf has said he hopes new parliamentary elections can be held in Pakistan by 9 January.
He said the Election Commission would determine the exact date of the vote for national and regional assemblies.
The US and UK cautiously welcomed the move and opposition head Benazir Bhutto called it a "first positive step".
Gen Musharraf was addressing his first news conference since declaring emergency rule on 3 November, though he did not say when it would be lifted.
He said imposing the emergency had been his "most difficult decision".
'National interest'
Gen Musharraf's allies abroad and critics at home have been urging him to bring the emergency to an end.
They question whether free and fair elections can ever be held while constitutional safeguards are suspended.
However Gen Musharraf insisted he had done nothing wrong and had not violated the constitution.
"I stand by it because I think it was in the national interest."
He said political leaders who had been arrested would be freed but that emergency rule was needed to ensure that the general election went smoothly.
"I would expect that all of them get released and participate in the elections, and they'll be free to go and do electioneering as per the rules given by the Election Commission."
"But if they disturb law and order, and if they want to create anarchy in Pakistan in the name of elections, in the name of democracy, we must not allow that."
Civilian transition
Gen Musharraf said elections should be held on schedule.
"I would request the Election Commission to hold the elections as soon as possible... which means, if you calculate 45-60 days from 20 November, we should have the elections before 9 January," he said.
National and regional assemblies would be dissolved in the coming days once they had completed their full terms. Provincial chief ministers had agreed to holding the new election on a single day, he said.
The Pakistani leader also gave no date for when he intends to step down as army chief of staff and take an oath as a civilian president.
He said that depended on how quickly the Supreme Court could validate his recent presidential election.
US Secretary of State Condoleezza Rice welcomed his vow to hold parliamentary elections but said the state of emergency should be lifted.
The UK Foreign Office also welcomed the move, adding that there should be "urgent action to restore the constitution".
Ms Bhutto, the former prime minister, said the news was positive but that the situation had "not been de-fused" and that it would be difficult to hold elections under emergency rule.
Bhutto protests
The president's news conference came as Ms Bhutto headed to the eastern city of Lahore to prepare for a large-scale protest against emergency rule.
The planned march - from Lahore to Islamabad - is due to start on Tuesday and could draw thousands of protesters if it is allowed to take place, correspondents say.
Asked whether Ms Bhutto's popularity had increased since emergency rule was imposed, Gen Musharraf countered that supporters outside her Islamabad house numbered 150-200.
He said people had to go to the rural areas - which account for 70% of Pakistan's 160 million population - to really gauge her popularity.
"In the West I know through your papers and through your remarks, you think that she is the next prime minister. I don't know who has given you this impression, how you have counted this vote, and what your calculations are based on.
"She has to win the election. If her party wins the elections, then only will we go into the other stage of whether to see who is going to be the prime minister."
PHOTO CAPTION
President Pervez Musharraf