Pakistan's new government struck a peace deal Wednesday with Islamic militants in a valley of northwestern Pakistan, a breakthrough for a policy that Western officials worry could take the pressure off Taliban and Al Qaeda hardliners.

The deal covers Swat, a former tourist destination 90 miles from the capital, Islamabad, where followers of a fundamentalist cleric have been battling security forces for almost a year.

A senior minister in the government of Pakistan's North West Frontier Province said the two sides sealed the 15-point plan on Wednesday during talks in the provincial capital, Peshawar.

Militants agreed to recognize the government's authority, halt suicide and bomb attacks and hand over any foreign militants in the area, minister Bashir Bilour told reporters after the talks.

In return, the government will release prisoners and make limited concessions on the demands of the cleric, Maulana Fazlullah, for the imposition of Islamic law in the region, he said.

Bilour also said that the army would "gradually" withdraw from the area — a key demand of the militants.

Political parties that formed a new coalition government seven weeks ago are offering peace to militants who renounce violence in an attempt to turn a tide of violence that shook Pakistan over the past year.

The North West Frontier Province's government is led by a Pashtun nationalist party which is a junior partner in the federal coalition and a key player in the peace effort.

The ruling parties blame the more forceful tactics of President Pervez Musharraf, a stalwart U.S. ally, for stoking Islamic extremism and the spread of militant religious movements to previous peaceful area, such as Swat.

But Western officials have expressed concern that any deals will be poorly enforced and simply allow Taliban and Al Qaeda militants to execute more attacks in Afghanistan and plot terror strikes in the West.