The Pakistan People's Party has demanded an inquiry into the assassination of its chief Benazir Bhutto, who died after being shot by a suicide attacker who blew himself up near the venue of an election rally in Rawalpindi.

"We demand a complete investigation to find out who was behind the attack," PPP's deputy chief Makhdoom Amin Fahim told a news conference in Islamabad on Thursday night.

"Bhutto's family and the party should be informed about the investigation," he said. The PPP has decided to observe 40 days mourning.

"We are in shock and we are mourning," Fahim said when asked if the PPP will still take part in the January 8 parliamentary polls. A decision on this issue will be taken after consulting Bhutto's husband Asif Ali Zardari.

He said that US Secretary of State Condoleezza Rice had phoned him and conveyed condolences on behalf of her government.

Fahim was with Bhutto in a bulletproof car when the attacker fired three shots and then blew himself up. She was waving to people from the vehicle's sun-roof at the time.

"Benazir was hit as she waved to PPP workers who were chanting slogans in her favour. If Benazir had not gone out of the car, she would have been saved," he said.

Bhutto was taken to the nearby Rawalpindi General Hospital where she was declared dead following emergency surgery.