Police in
The house in which Bhutto is staying has been surrounded and hundreds of activists are reportedly being held.
The clampdown aims to stop a "long march" of protest taking place.
In response, Bhutto called for Gen Pervez Musharraf to quit as president, an increase on her demands for free elections and an end to emergency rule.
However, the BBC's Barbara Plett cautions that it remains to be seen whether Bhutto is simply expressing what she sees as the national mood or whether she is preparing for a united opposition campaign to oust the military leader.
Musharraf attracted fierce international protest when he imposed emergency rule in
On Monday a Commonwealth meeting gave
Bundled away
Bhutto had called on her supporters to join her in a "long march" of protest against emergency rule from
But - for the second time in five days - Pakistani police have now placed Bhutto under house arrest, saying the planned march defies emergency laws and that Bhutto's personal safety is under threat.
Vehicles, barbed wire and metal barriers surround the house where she is staying, and thousands of police are said to be on duty in
Dozens of Bhutto's supporters who attempted to gather for the march chanted slogans, but were then bundled into police vans and driven away, our correspondent says.
Bhutto said thousands of opposition activists had been arrested across Punjab province - of which
'Time to leave'
In interviews with the BBC, she said the Pakistani people had lost confidence in Gen Musharraf's ability to steer the country towards democracy.
"It's time for him to leave," she said.
Our correspondent says this demand apparently marks a significant shift from Bhutto.
Her demands were previously limited to calling for an end to emergency rule and demanding that Gen Musharraf relinquish his army position.
But it remains unclear if Bhutto's words will unite an opposition movement that until now has been fragmented, she adds.
Until now, neither opposition activists nor lawyers who spearheaded protests against emergency rule have participated in the protests outside Bhutto's house - reflecting their suspicions that Bhutto was still dealing with General Musharraf.
On Monday, Bhutto said her Pakistan People's Party (PPP) would hold no more talks with Gen Musharraf on a possible power-sharing deal.
Police threat
Bhutto says she still wants the 270km (170-mile) march from
But a senior police official, quoted by Reuters news agency, said: "Her residence is an official jail now.
"If they try to take the law into their own hands, then we will resort to all means necessary, including charging with batons and tear gas."
Musharraf says a parliamentary poll will be held in January, but opposition leaders want an end to emergency rule first.
On Monday, Commonwealth foreign ministers meeting in
The meeting also demanded Musharraf step down as army chief and release political detainees.
The country was reinstated in 2004.