The decision could deepen the political crisis that has engulfed Pakistan since President Pervez Musharraf imposed emergency rule one month ago.
Sharif was to meet later Monday with fellow opposition leader Benazir Bhutto to discuss whether to jointly boycott the Jan. 8 elections.
Raja Qamaruz Zaman upheld objections from other candidates to Sharif's candidacy.
A lawyer for Sharif said they were considering an appeal to a tribunal composed of senior judges.
"This decision has been made under pressure. This shows how free and fair the elections will be," said the lawyer, Imtiaz Kaifi.
Sharif, a two-time former prime minister who returned from exile late last month, is pressing for the opposition to unite and boycott the ballot because of Musharraf's use of emergency powers to purge the judiciary and secure his own continued rule.
Candidates seeking to contest the same National Assembly seat in Lahore had complained that Sharif was ineligible because of a conviction on charges related to the 1999 coup, in which Musharraf ousted his government.
A court convicted Sharif of hijacking and terrorism charges for trying to prevent a plane carrying Musharraf back from a foreign trip from landing in Pakistan, despite a shortage of fuel.
A year later, Sharif agreed to go into exile for 10 years to avoid a life sentence in prison.
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Rivals also complained about Sharif's alleged default on a bank loan and an incident in 1997 in which Sharif's supporters stormed the Supreme Court.
Zaman said only that the objections were "accepted" and provided no details.
The opposition demands that Musharraf, a close U.S. ally, rescind the state of emergency, under which he fired independent-minded Supreme Court judges, muzzled the media and detained critics.
However, Bhutto's party is reluctant to boycott the ballot, saying it would hand pro-Musharraf parties a walkover.
"The regime does not need to rig elections that are boycotted," Bhutto told The Associated Press, forecasting that her party will win a fair election.
"But we still have the option later of protesting a rigged election, so we would rather all the political parties take part," she said after talks with visiting Turkish President Abdullah Gul in Islamabad.
A boycott would be a serious blow to U.S.-backed efforts to return Pakistan to democracy after eight years of military rule. Musharraf has promised to lift the emergency
-- as demanded by Washington and the opposition -- on Dec. 16.
[Associated
Press; By SADAQAT JAN]
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