Bhutto, 54, died from head injuries sustained in a suicide bomb attack as she left an election rally in Rawalpindi near Islamabad on Thursday. At least 26 died and 90 were injured in the blast. Al-Qaeda has claimed responsibility for Bhutto's murder.
The funeral was broadcast live on Pakistan television and tens of thousands gathered to pay their respects to the country's first democratically elected leader. The funeral was attended by Bhutto's husband, opposition politician Asif Ali Zardari, and their three children, and leaders of Bhutto's Pakistan People's Party (PPP).
The simple wooden coffin covered with the PPP's red-black-and-green flag was driven through crowds who lined the streets to bid farewell to the popular politician, a strong critic of the government of incumbent President Pervez Musharraf. Bhutto accused the government of failing to take decisive action against al-Qaeda and vowed to bring stability to the country amid the recent surge of Islamist violence.
Bhutto, who had twice been the country's prime minister, was about to run in parliamentary elections January 8 as leader of the PPP.
She was buried at the family mausoleum in Larkana in the Sindh province, next to her father, deposed Premier Zulfikar Ali Bhutto, the founder of the PPP. A former president and premier, he was hung in 1979 by the military ruler, Gen. Muhammad Zia-ul-Haq, allegedly for sanctioning the assassination of a political opponent.
Several hundred PPP supporters wearing mourning scarves and carrying party flags gathered to express their grief at a meeting in Islamabad. Some of them were armed with sticks and burnt images, chanting anti-government slogans.
"We do not want any clashes, we do not want riots in the capital on the day of the funeral of our leader, Benazir Bhutto, but we want the authorities to respect our position. We believe the authorities are responsible for her death," said an organizer of the meeting and PPP member Saleh.
Police tried not to provoke the demonstrators.
Pakistani Prime Minister Muhammadmian Soomro said a government investigation had been launched into Bhutto's murder. "The public will be carefully informed about the investigation," Soomro said.
The Pakistani Interior Ministry said citing the autopsy that Bhutto had died from shrapnel wounds to her head.
Bhutto returned to Pakistan in October after more than eight years of self-imposed exile. Her arrival was overshadowed by a terrorist attack which killed 140 people and injured 500 as hundreds of thousands of people lined the streets to greet her homecoming.