Defending his decision to impose emergency rule, Musharraf said: "I did not violate the constitution and the law of this land.
"Whatever the cost, I bear responsibility, and I stand by it."
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Condoleezza Rice, the US secretary of state, on Sunday welcomed Musharraf's pledge to hold elections but kept up America's calls for him to lift the state of emergency as soon as possible.
"Well my reaction is that the positive element, that the elections are going to be held and held very soon and also that the president said he was going to take off his uniform - these have both been essential to getting Pakistan back on a democratic path."
She was in Lahore, in the province of Punjab, in the run-up to a mass protest she has planned against the emergency rule.'Doors open'
Bhutto said the announcement alone would not defuse Pakistan's political crisis and that it would be difficult to hold elections when the country was in a state of emergency.But she said she has not shut the doors on talks with Musharraf.
James Bay's Swat Valley report
Speaking to Al Jazeera, Nawaz Sharif, a former Pakistani prime minister who is now living in exile in Saudi Arabia, said Musharraf was deliberately trying to stifle opposition to his rule.
"Any elections under martial law will not serve any purpose ... Pakistan is in the grip of great crisis," he said.
He said Musharraf "favoured questions from foreign reporters. He was clearly trying to convince the international community that the way forward is the way he is proposing".
Musharraf said he had to take the dramatic step of imposing emergency rule to address the "turmoil, shock and confusion" in Pakistan and to better fight Muslim fighters in the interior of the troubled northwest and in the Swat valley.
That battle, he said, would continue until the extremists are defeated.
Before he declared emergency rule, elections had been expected by mid-January, two months after the expected dissolution of the national and provincial assemblies.
Last week, Musharraf said elections would be held by February 15.