Musharraf is one of the great statesmen in the world. It wouldn't be a surprise for Pakistan to recognize Israel.
Check out this link from the Pak Tribune, a Pakistani English-language internet newspaper. They have an on-line question whether Pakistan should recognize Israel, and while there are some of the predictable objections, it seems that the vast majority of answerers (who give Pakistan as their home state) are in favor of recognition.
To me, this is pretty amazing.
The link is at
http://www.paktribune.com/speakout/index.php?id=12&PHPSESSID=f7e7c0923c34b45ed540bde71ca2bdbd