(CNN) -- Pakistan's new government has made good on its promise to negotiate with militant groups within its borders by releasing a jailed pro-Taliban leader who recruited thousands of fighters to battle U.S. forces in Afghanistan.
Kidnapped Pakistani ambassador to Afghanistan Tariq Azizuddin.
Sufi Mohammed agreed to cooperate with the government upon his release from prison Monday after serving a six-year sentence, according to Sardar Hussain Babek, the information minister for North West Frontier Province.
Mohammed was captured in Pakistan after fleeing Afghanistan in 2002, months after the U.S.-led invasion that toppled the Taliban rulers there.
Under the terms of his release, the provincial minister said, Mohammed's banned hardline group, Tehreek Nifaz-e-Shariat Mohammadi, is expected to lay down its arms and forgo violence.
Babek said the agreement is evidence that the new government has done in a month what the old government under President Pervez Musharraf could not do in years in terms of developing better relations with people in the North West Frontier Province.
But Mohammed's son-in-law Fazlullah, who took over his group during his jail stint, announced Tuesday in his radio broadcast that he will continue his fight to impose fundamentalist Islamic law in northwest Pakistan, according to local reports.
Last year, Fazlullah's followers battled the Pakistani military for control of Swat, a mountainous region of the frontier province that was once a popular tourist destination.
Pakistan's Daily Times and other local media are reporting that Mohammed's release was a demand of those who kidnapped Pakistan's ambassador to Afghanistan in February.
Asked whether the government agreed to release Mohammed and other militants in exchange for the ambassador, a spokesman for Pakistan's foreign office refused to disclose any details for fear of weakening the government's negotiating power.
Sufi Mohammed, who is in his 70s and in poor health, is not exactly a key player anymore, according to Marvin Weinbaum, a former State Department analyst on Pakistani affairs.
Many of his former followers resent Mohammed because "hundreds that he recruited got chewed up very quickly, captured or killed" in Afghanistan while he fled the country to Pakistan in 2002, said Weinbaum of Washington's Middle East Institute.
But because of his high profile, Weinbaum said, his release is a significant development that is sure not to sit well with the United States -- a key ally that funnels billions of dollars to Pakistan to fight terrorists along the Afghan border.
U.S. State Department spokesman Tom Casey had no immediate comment on the reports of Mohammed's release Monday.
Pakistan's new ruling coalition has said it is willing to negotiate with some militant groups, a break from U.S.-backed Musharraf's policy of using force.
Mohammed's group wants to impose sharia law in the tribal region of Pakistan that borders Afghanistan. He said he will still work toward that goal, but in a peaceful manner.
Sharia is a legal and social code designed to help Muslims in their daily lives. It has proved controversial, however, because of its use in some Muslim states to justify suppression of women's rights and extremely brutal forms of punishment, including beheadings.
In Mohammed's absence, his group -- under the leadership of Fazlullah -- continued its movement to Talibanize the frontier province and the semi-autonomous Federally Administrated Tribal Areas of Pakistan.
In part, the group has gone about its goal through intimidation, such as burning down music shops. The group wants to institute a Taliban-like system: no music or television, veils for women and beards on men.
Musharraf had vowed to finish off extremism in every corner of the country and wanted to yank the free rein that pro-Taliban chiefs like Fazlullah had in the region. He adopted the get-tough approach because he, too, had tried diplomacy with militant groups -- and failed.
In 2006, he struck a deal with the pro-Taliban tribal leaders in North Waziristan, pulling Pakistani troops out of the region in return for tribal leaders' promise not to harbor any terrorists.
The deal backfired. It was blamed for an increase in attacks on U.S. troops across the border in Afghanistan as Taliban fighters were able to prepare, train, and reconstitute weapons supplies without interference from the Pakistani government.
A report by the International Crisis Group said Musharraf's 2006 North Waziristan agreement was directly responsible for creating a safe haven for al Qaeda's leadership inside Pakistan. E-mail to a friend
CNN's Zein Basravi contributed to this report