Seamer Mohammad Abbas ripped Australia's top order apart on Wednesday as the visitors struggled at 136-3 on the fourth day of the first Test after Pakistan set a huge target of 462 runs.
1st Test, Day 2: Finch, Khawaja start cautiously after Sohail's maiden Test ton takes Pakistan to 482
Khawaja was lucky to notch another half-century. Asad Shafiq couldn't hold on to a late sharp chance in the first slip before the left-hander completed his fifty in the last over of the day.
Travis Head was not out on 34 as both batsmen tried to revive the innings after Abbas' (3-26) burst had left Australia reeling at 87-3.
Australia faces a monumental task to survive the last day on a wearing wicket. The team requires a further 326 runs or to bat out the minimum of 90 overs on the last day.
Australia's highest ever successful run chase to win a Test match came in 1948 when it chased down 404 against England in Leeds.
Finch and Khawaja had carried Australia to 87-0 before Abbas claimed three wickets in two overs after tea. Finch played half forward to Abbas' incoming delivery and was trapped leg before wicket. One ball later, coming around the wicket, the right-arm seamer found the faint edge of left-hander Shaun Marsh's bat.
Mitchell Marsh also fell lbw to Abbas' sharp incoming delivery with Pakistan captain Sarfraz Ahmed going for the television referral.
The collapse was similar to Australia's first innings effort of 202 runs when the visitors lost 10 wickets for just 60 runs after Finch and Khawaja had provided a solid opening stand of 142 runs.
Both Australian openers had negotiated the early twin spin threat of Yasir Shah and Bilal Asif after Pakistan declared its second innings. Khawaja didn't allow Shah to settle down early, reverse sweeping the legspinner with authority, while Finch played some exquisite cover drives.
Both batsmen looked comfortable until Abbas returned after tea and toppled Australia's inexperienced top order.
Pakistan, which scored an impressive 482 in the first innings, declared half an hour after lunch when Shafiq (41) missed out on a half-century and holed out in the deep while going for quick runs.
Resuming on 45-3, Pakistan added a further 110 runs in the first session and took the total to 155-5 as the Australian spinners couldn't stop the flow of runs.
Opener Imam-ul-Haq scored a fluent 48 and first innings century-maker Haris Sohail made 39 before both batsmen fell at the same total of 110.
Imam offered a tame return catch to left-arm spinner Jon Holland (3-83) and Sohail was trapped leg before wicket by Marnus Labuschagne.
Nathan Lyon (2-58) surpassed West Indies great Lance Gibbs' test wickets tally of 309 when Shafiq was caught by Marsh at deep midwicket before Ahmed declared.