Bangladesh authorities ordered a security alert on Saturday as a deadline set by a 14-party political alliance for the removal of the chief election commissioner over allegations of bias neared.
Former prime minister Sheikh Hasina's Awami League alliance has threatened a nation-wide transport blockade from Sunday if the country's interim administration did not fire the election commissioner ahead of national elections in January.
Hasina accuses the election commissioner of being partial towards its main rival, the Bangladesh Nationalist Party led by former prime minister Begum Khaleda Zia, who stepped down last month to allow an interim administration to hold the elections.
Supporters of Khaleda have rejected the charges and said they would take to the streets to oppose the Awami League's bid to disrupt transport across the country.
President Iajuddin Ahmed who leads the caretaker administration met with top police officials and the elite Rapid Action Battalion force to review security arrangements.
"The country is up for a likely breakdown in law and order as the political rivals have drawn the battle lines," said a senior police officer.
"This may push the country into an unprecedented political crisis," said a government official.
The face-off came as US assistant secretary of state Richard Boucher arrived in Dhaka where he was expected to hold talks with leaders of rival political parties to defuse tensions.
"The United States hopes to see a free, fair and non-violent election in Bangladesh," Boucher told reporters after talks with Foreign Secretary M. Hemayetuddin.
Boucher, who is on a tour of South Asia, will also meet Hasina and Khaleda, and the president.
Elections in Bangladesh have in the past been violent and marred by allegations of rigging and voter intimidation.
Bangladesh in addition, faced a wave of attacks last year, blamed on Islamist militants, sparking concern at home and abroad.
Foreign envoys, including US ambassador Patricia A. Butenis and her European colleagues, have been shuttling between rival political camps trying to defuse the tension gripping the country ahead of the elections.
Schools and universities will likely remain shut on Sunday, a working day in Bangladesh, because of the opposition threat to blockade the country, education officials said.
Iajuddin has so far made no public comment on the opposition demand to act against Chief Election Commissioner M.A.Aziz.
But Aziz told reporters last week that the president had asked him to continue work on holding of the elections.