Rebel tribesmen protecting hundreds of alleged al-Qaida and the Taliban members had been threatened with "serious consequences" if they failed to surrender their colleagues and release 14 hostages by 10:00 (05:00 GMT) on Thursday.
As of 11:00 there was still no sign of surrender, but authorities appeared resigned to giving more time for negotiations by a delegation of tribal elders to succeed.
"There is resentment among the tribes over the operation which may compel the government to go slow," a senior army official, who asked not to be named, told reporters.
"If the authorities are satisfied there is some positive development, the pause in the operation may be extended."
In a sign of widening tribal anger at the al-Qaida hunt, there have been at least four deadly attacks on troops and police in the semi-autonomous tribal zone this week and the main northwest city of Peshawar came under rocket attack - without casualties - on Tuesday night.
Some officials believed a 'high
value target was in the area
The official said the local administration in South Waziristan was expecting a report from the elders' delegation "some time Thursday."
Around 1,500 tribesmen and elders have gathered in the district capital Wana to await the outcome of at least three days of talks between elders and tribesmen locked in battle with Pakistani forces since 16 March.
The delegation has been trying since Monday to persuade the Yargulkhel clan, a Pashtun sub-tribe, to lay down arms and hand over the fighters.
Deadlines have been extended daily since then, and commanders have conceded that most of the al-Qaida fighters, including an unidentified "high value target", have probably escaped.
The offensive - Pakistan's largest ever against suspected al-Qaida members - appears to have been a disaster for the army, with at least 49 troops dead or missing since the first raid on 16 March. Western diplomats believe the real troops' toll could be as high as 100.
A leading military observer told Aljazeera.net the Pakistani military had "no heart for the job" but was being forced to do the bidding of the US.
"Either way Pakistan loses. They are acting on faulty intelligence from the US. If the fighters slip away or if the Pakistani army fails to defeat them, the US can turn up the heat and ask for its own forces to do the job," said Hamid Gul, a former head of Pakistan's Inter Services Intelligence.
Gul said that while he did not doubt there were some suspected al-Qaida and Taliban fighters in the region, most of the "wanted foreigners" seemed to be Uzbeks, Tajiks and Chechens who settled there after the liberation of Afghanistan from the Soviet Union in 1989.
He predicted that the operation would haunt Pakistan's military dictator General Musharraf.
"This could prove to be Musharraf's Waterloo. He is trying to keep the wolf from the door by throwing crumbs and pieces of meat but the wolf keeps on coming. The danger is that he will lose support in the very institution that is his strength."
At least 31 foreign fighters were
killed by Pakistani forces
So far the assault by 7,500 army and paramilitary troops against an estimated 500 fighters has resulted in the arrest of 123 suspected local and foreign fighters, and the deaths of 31 fighters and the killings of 15 civilians.
The troops began a fierce assault on 18 March against hundreds of heavily-armed fighters entrenched in mud-walled fortresses in two villages near Wana.
The suspected al-Qaida fighters and their tribal protectors have put up the strongest resistance encountered by Pakistani forces in their two year al-Qaida hunt.
The assault followed a botched paramilitary raid on 16 March in which 16 troops were killed in surprise attacks by scores of heavily armed fighters.
Some officials had believed the level of resistance indicated a "high value target," possibly as senior as al-Qaida's number two Ayman al-Zawahiri, was being protected. But the Egyptian doctor, Usama bin Ladin's deputy and personal physician, was never seen.
Army attack helicopters flew over Wana on Thursday morning but residents said there was no sign of preparations for a major assault.