Pakistan's Supreme Court ruled Friday that President Gen. Pervez Musharraf's suspension of the country's chief justice was illegal, a decision pro-democracy advocates in the country say challenges the leader's authority.

Chief Justice Iftikhar Mohammed Chaudry's suspension in March was followed by days of demonstrations by lawyers and opposition parties that have grown into a powerful pro-democracy movement.

Iftikhar Mohammed Chaudhry, here being mobbed by supporters, has been reinstated as Pakistan's chief justice.
(K.M.Chaudary/Associated Press)

As lawyers celebrated outside the court in Islamabad, Chaudhry's chief counsel, Aitzaz Ahsan, told reporters that the case alleging misconduct by Chaudhry had been "quashed."

"He has been restored and it is a victory for the entire nation," Ahsan said.

On Tuesday, 15 people were killed when a bomb went off at a rally of Chaudhry supporters.

The government claims Chaudhry was suspended for the misuse of his office for personal gain, a charge the judge vehemently denies.

His supporters have decried the suspension as a move by Musharraf aimed at undermining the independence of the country's judiciary and smoothing his path to re-election with the current majority he holds in Pakistan's parliament.

Decision signals move towards democracy

The verdict has been described as the biggest challenge to Musharraf since he seized power in a bloodless 1999 coup.

Within the country, the decision is seen as strengthening the independence of courts that will soon hear Musharraf's plan to seek a five-year presidential term from outgoing lawmakers rather than wait for the January parliamentary elections.

Former Pakistani cricket player turned politician Imran Khan says the ruling is "a landmark decision."

Khan is the founder of the country's Movement for Justice Party, a pro-democratic group focused on bringing what they say is justice to the people of Pakistan through an independent judiciary.

"We see this as a new tomorrow, a new dawn, we think this is the beginning of a democratic system in Pakistan," he told CBC News.

"The way we are heading …the suicide bombings, the radicalization of the society, extremism, we need a general democratic system with the rule of law for the survival of our country, this is the beginning," Khan said.

He added the president is really left with no choice but to support the ruling because so many members of the society have turned out in support of the chief justice.

Musharraf faces rising tide of militancy

The decision comes just as Musharraf faces a rising tide of Islamic militancy in the country's north following the storming of Islamabad's Lal Masjid, or Red Mosque.

Militants declared an end to a 2006 peace deal they signed with the government to stop attacks on troops and officials after security forces overran the mosque.

More than 106 people, most of them militants, died during the week-long siege and subsequent government assault.

In the latest attack, a suspected militant struck a small checkpoint on the outskirts of Miran Shah with his explosives-laden car on Friday, killing one soldier and two passers-by, according to two local security officials.

The officials, who spoke on condition of anonymity because of the sensitive nature of their jobs, said the attacker detonated the car bomb when asked to halt.

The attack comes a day after three suicide bombings in northwestern Pakistan and the south killed at least 51 people.

With files from the Associated Press