Sufi Mohammad, a religious leader helping mediate between the Taliban, the North West Frontier Province's provincial government and the central government, had in the past accused Islamabad of "dragging its feet" on implementing a deal, Hyder said.
The government of the NWFP had threatened to pull out of the alliance if the accord was not signed, Hyder said.
"The president sent the law to parliament and, in a surprise development, the parliament passed it immediately," he said. The law was then signed off by Zardari.
"The spokesman for the Taliban in Swat has welcomed the deal and so has Sufi Muhammad."
The agreement by the Pakistani government has been criticised by human rights groups and Western officials who say that the Swat valley could now become a safe haven for the Taliban and other armed groups.
"There is celebration in Swat and an expectation that the demands of the people might lead to a peaceful settlement, but others are questioning whether the Taliban will now relinquish their control of other Pakistani territories," Hyder said.
"The deal did mention that once the regulation on Sharia in Swat goes into effect, those people would disarm."