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Pakistani officials on Sunday hammered out a peace deal with a Taliban-linked group that could lead to the enforcement of elements of Islamic law in parts of the northwest, prompting militants in the blood-soaked Swat Valley to declare a 10-day cease-fire as a goodwill gesture.

The agreement, expected to be formally announced Monday, could re-spark U.S. criticism that Pakistan's truces with insurgents merely gives them time to regroup. Although several of its past deals failed, Pakistan says force alone cannot defeat Al Qaeda and Taliban fighters sowing havoc in its northwest and attacking U.S. troops in neighboring Afghanistan.

Swat is a former tourist haven that has fallen under heavy militant sway despite a lengthy army offensive. Regaining Swat is a major test for Pakistan's shaky civilian leadership. Unlike the semiautonomous tribal regions where Al Qaeda and Taliban have long thrived, the valley is supposed to fall fully under government control.

Provincial government leaders confirmed they were talking to a pro-Taliban group about ways to impose Islamic judicial practices in the Malakand division, which includes Swat. Taliban spokesman Muslim Khan said the militants would adhere to any deal reached with the group if Islamic law was actually implemented in the region.

Khan announced the militants had freed a Chinese engineer held captive for nearly six months as a positive gesture. Long Xiaowei — who was kidnapped in August — was freed Saturday, days before a planned visit to China by Pakistani President Asif Ali Zardari.

Khan also announced the 10-day cease-fire.

"We reserve the right to retaliate if we are fired upon," he said. "Once Islamic law is imposed there will be no problems in Swat. The Taliban will lay down their arms."

But provincial law minister Arshad Abdullah said the agreement would require the pro-Taliban group to convince the militants to first give up violence. Then, existing laws governing the justice system can be amended or enforced, he said.

"Our agreement is conditioned with peace," Abdullah said. "They have to succumb to law. They have to put down their arms."

The agreement was reminiscent of past deals that required militants to stop fighting, but which eventually unraveled amid militant complaints that the government was not meeting their demands.

The pro-Taliban group — known as the Tehrik Nifaz-e-Shariat Mohammedi, or the Movement for the Enforcement of Islamic Law — is led by Sufi Muhammad, who Pakistan freed from custody last year after he renounced violence.

Muhammad is the father-in-law of Maulana Fazlullah, the leader of the Swat Taliban. Muhammad, who has long agitated for Islamic law in the region, said that after the formal announcement he will go to Swat and ask Fazlullah and his men to lay down their arms.

Pakistan has tried to avoid negotiating directly with militants, often using tribal elders as intermediaries. The new talks revolve around some 22 points, said Mian Iftikhar Hussain, information minister for North West Frontier Province.

Although agreeing to an Islamic judicial system is a concession to the insurgents, it is also a long-standing demand of many civilians in the conservative region who are dissatisfied with the inefficient secular justice system.

But how exactly the government is willing to define Islamic law remains to be seen. A similar deal reached last year was supposed to let religious scholars advise judges in the courts. Hussain said that agreement encountered obstacles.

The Swat Taliban's version of Islamic law is especially harsh. They have declared a ban on female education, forced women to stay mostly indoors and clamped down on many forms of entertainment.

Hussain noted that the Swat Taliban had responded well to the talks and hoped that it would lead to an end to violence in the region, but he warned that if "someone does not agree and does not adopt the way of dialogue, the government would be compelled to used force to establish its authority." A broad peace deal reached last year with Fazlullah's militants effectively collapsed within a few months, and Pakistani security officials blame that agreement for the militants' gains in Swat since.

Pakistan Foreign Minister Shah Mahmood Qureshi deflected concerns about a negative U.S. reaction to the talks, insisting the country was reaching out to peaceful groups.

"We are not compromising with militants, instead trying to isolate the militants, and for that I do not think America will have any objection," he said.

A string of attacks on foreigners has underscored the overall deteriorating security in the nuclear-armed country.

U.N. officials said Sunday they were still trying to establish contact with the kidnappers of one of their American employees seized Feb. 2 in the southwest city of Quetta. On Friday, the kidnappers of John Solecki threatened to kill him within 72 hours and issued a 20-second video of the blindfolded captive.

It was unclear exactly when the deadline would expire, and U.N. officials said Sunday they were still trying to establish contact with the kidnappers, who identify themselves as the previously unknown Baluchistan Liberation United Front. The name indicates the group is more likely linked to separatists than to Islamists.

A Polish geologist was apparently beheaded by Islamist militants, according to video released earlier this month. If confirmed, it would be the first killing of a Western hostage in Pakistan since American journalist Daniel Pearl was beheaded in 2002.