(Adds objections to "The Satanic Verses", paragraph 10) By Simon Cameron-Moore ISLAMABAD, June 19 (Reuters) - Life could have turned out so differently for Salman Rushdie, if Pakistani police had let demonstrators 18 years ago reach the row of government buildings leading to Islamabad's diplomatic enclave. Instead, the crowd protesting the British author's novel "The Satanic Verses" was held back fatefully near the American cultural centre on the avenue leading to the presidency building. On their way to deliver a petition to British High Commission officials, protesters turned their ire on the squat concrete building, with the "Stars and Stripes" flying from the roof. Stones were thrown. Tear gas failed to disperse the crowd, and the police opened fire just as the American flag was hauled down and thrown to demonstrators. At least five protesters were killed and scores were wounded. "Two days later there was Khomeini's fatwa, and all Muslims everywhere were agitating," recalled Aitzaz Ahsan, who was then interior minister in Benazir Bhutto's 3-month-old government. Without the Pakistani deaths, the late Ayatollah Ruhollah Khomeini, Iran's supreme religious leader, might never have been inspired to pronounce on Radio Tehran the 1989 fatwa, or edict, calling on Muslims to kill Rushdie. Rushdie, who was born into an Indian Muslim family from Bombay, could have avoided years of living in fear of his life. And Britain might have bestowed a knighthood on him this month for services to literature without reigniting a controversy in Pakistan, that 18 years ago swept through the Islamic and Western worlds. ECHOES IN HISTORY "The Satanic Verses", which many Muslims consider blasphemous and believe ridiculed the Koran and early history of Islam, was first published in Britain five months before the February 12 bloodshed in Islamabad. It came at a critical time in Pakistan's history. The country was emerging from a decade of military dictatorship under President Mohammad Zia-ul-Haq, whose policies of Islamisation are often blamed for sowing the seeds of Islamist extremism and militancy. That month, the Soviet army retreated from Afghanistan, after a 10-year war with mujahideen guerrillas launched from Pakistan and covertly paid for by the United States and Saudi Arabia. The echoes of history resound two decades on, as religious conservatives and liberals struggle for the helm of this volatile Muslim nation, while another military ruler, President Pervez Musharraf, faces a judicial crisis during election year. "Liberals are being beaten black and blue, fundamentalists are winning, they have gained ground and Talibanisation is spreading," Ahsan said. The demonstrators 18 years ago began their march from Lal Masjid, the Red Mosque, scene today of a stand-off with radical clerics, who have threatened to unleash suicide bombers if the authorities use force against thousands of students in their Taliban-style movement. Ahsan is now the leader of a legal team fighting for the reinstatement of a judge, Chief Justice Iftikhar Chaudhry, who has become a symbol of resistance to Musharraf. Bhutto is in self-exile, but wants to become prime minister for a third time, possibly by forming a common front against an Islamist tide that Musharraf has slowed but not turned. Zia's son is Religious Affairs Minister Mohammad Ejaz ul-Haq, who on Monday called on Muslim countries to break off relations with Britain unless Rushdie's knighthood is revoked, and warned that insults to the Prophet Mohammad risked suicide attacks.