'Harmful to peace'

"We also asked the government to implement Nifaz-e-Adl [a system of Islamic justice] by March 15 after which we will launch a protest," Muhammad told a news conference in Mingora, the main town in the valley. 

In depth

Swat: Pakistan's lost paradise

Sharia in Pakistan's Swat

Muhammad also set a March 10 deadline for the release of prisoners.

Maulana Fazlullah, Muhammad's son-in-law and leader of the Taliban in Swat, said on Saturday on illegal FM radio that the government's reluctance to release captured fighters was harmful to peace efforts.

Taliban fighters had released seven men after the agreement.

Taliban fighters, who control much of the valley, declared an indefinite ceasefire on Tuesday and the Pakistan army said it was suspending operations.

Fighting in Swat began in late 2007 after hundreds of fighters infiltrated from Afghan border enclaves to support the Taliban and their drive to introduce Islamic rule.

At least 1,200 civilians have been killed in the violence.