Khan said the Taliban in the valley, led by Maulana Fazlullah, also decided to release three people, including two politicians, as a "goodwill gesture".

'Optimism and hope'

The fighters had earlier announced a 10-day truce in Swat which the latest announcement extends indefinitely.

Tayyab Siddiqui, a Pakistani political analyst, told Al Jazeera on Tuesday there is "a lot of optimism and hope" that the ceasefire would hold.

He said the military option had not been as successful at it was anticipated and that both sides were "exhausted".

Al Jazeera's Imran Khan, reporting from the Pakistan capital, Islamabad, said details about the ceasefire were yet to emerge.

"The Taliban have been steadfast in their demands, saying they want to be in control of the type of sharia that's introduced," he said.

"They want a release of all Taliban prisoners, and they want the Pakistani army to leave the area."

Maulana Fezlullah the leader of the Pakistani Taliban, is due to give a radio address on Tuesday evening where he'll clarify all these details.

The developments come after the Pakistani government signed a controversial deal with a pro-Taliban cleric to enforce sharia law in Swat in an effort to restore peace.

The Pakistani authorities had been negotiating with Maulana Sufi Mohammad, Fazlullah's father-in-law and leader of the Tehrik-e-Nifaz Shariat Muhammadi, regarding the implementation of sharia in the region.

On Monday, the Pakistani Taliban announced a separate ceasefire in the Bajaur region, neighbouring Swat.


In depth

Swat: Pakistan's lost paradise

Sharia in Pakistan's Swat

Bajaur is a major transit route for the fighters travelling to fight US and Nato forces in neighbouring Afghanistan.

The US and other Western governments had criticised the Swat truce and negotiations, saying they could create a safe haven for al-Qaeda and Taliban in the region.

Unlike in Swat, the Taliban in Bajaur had been losing ground in recent months, most analysts say.

The Pakistani military began its offensive against fighters in Bajur in September last year and claims to have killed around 1,500 Taliban fighters.

Fighting began in Swat in late 2007 after hundreds of fighters infiltrated from Afghan border enclaves to support Fazlullah and his drive to introduce hardline Islamist rule.