Pakistan's government agreed a peace pact with pro-Taliban groups in February in exchange for the enforcement of sharia, or Islamic law, in the Swat valley.
|Pakistani families displaced by the fighting in Swat are being housed in makeshift camps [AFP]
The Taliban in Pakistan has told Al Jazeera that the deal, which covers an area in part of the North West Frontier Province's Malakand division, is over. Al Jazeera's Imran Khan provides answers to some common questions concerning the crisis.
What is the sharia deal in Malakand and why is it controversial?
The deal was negotiated by three parties to bring an end to the fighting there. It involved the Taliban, Sufi Muhammad, a pro-Taliban local religious leader, and the government of Pakistan.
It was controversial because it put the Pakistani Taliban in control of the area.
Muslim Khan, a spokesman for the Pakistani Taliban, has declared the deal dead. Why and what are the implications for security?
This deal was a prototype and there were high hopes that if it worked it could be extended to other parts of the North West Frontier Province (NWFP) where the Taliban have the upper hand.
However, when it fell apart, primarily due to both sides saying the other violated the agreement, an impasse was reached.
The problem was the deal itself. It was never really clear what was negotiated. For example, did the Taliban agree to put down arms, or merely not to have them on public display? With such confusion it was only a matter of time before problems occurred.
Security in the region is as bad as ever. Residents have fled to refugee camps, the Pakistan army is now fully engaged and both sides are unwilling to back down.
How much power do pro-Taliban forces have in the region? How united are the anti-government forces?
Pro-Taliban fighters are beginning to develop a loose alliance between themselves. Contact has been established with other groups, and fighters have moved into some of Pakistan's other provinces, most notably Punjab. They have significant support within the areas they control.
Can Pakistan's security forces effectively take control of the region?
The Pakistani government is coming under criticism for its handling of this crisis. Many inside Pakistan are worried that the army is not doing enough to quell the Taliban.
Although deployed in significant numbers in the area, the vast majority of Pakistan's forces are designed to fight India, not stop the spread of the Taliban.
The Pakistani army has, many say, the resources but not the will power. The army says that this way of thinking is wrong. They say that they must act slowly and carefully in order to minimise civilian casualties.
What influence does Sufi Muhammad, who brokered the deal, retain in the region and over the pro-Taliban fighters?
Sufi Muhammad seems to have retreated. It is said he has little influence with either side and so far remains on the sidelines.
What resistance is there among NWFP residents to the Taliban and equally what level of support? What will be the impact on "ordinary" Pakistanis? How many will be forced to flee the region, how many already have?
Anecdotal evidence would suggest that in major urban centres there is concern over the Taliban, but no one expects them to take over Peshawar, the provincial capital, any time soon.
However, unless a peace agreement is reached, Pakistan faces a major insurgency that will take years to die down.
There is no doubt that the Taliban have support but the fear is that the more US drone attack kill civilians, and the more intense the fighting gets across the NWFP, then the Taliban could become an ethnic Pashtun movement.
This movement, which would draw from and galvanise the majority of Pashtuns who make up the population of the NWFP, could completely destabilise Pakistan.
It's a long way off happening yet, but given the fluid nature of war it's a concern to many.
Why is the US so exercised over the situation? Are their stated concerns regarding nuclear facilities in the region valid in this instance?
The US is reportedly furious with Pakistan over its handling of the crisis.
It would much rather the army took control of the area with much more aggressive action and trap the Taliban on both sides of the border using Nato and multinational forces on the Afghan side.
In Washington, certainly among more hawkish figures, is the fear that the Taliban could gain control of Pakistan's nuclear arsenal.
That fear is dismissed by most people in Pakistan as laughable due to the high level of education and training required to operate a nuclear weapon.
However, what is less funny are the US drone attacks. They are killing civilians and have so far failed to kill any significant Taliban or al-Qaeda figures.
That is angering many in Pakistan.
US drones attacks are said to be the best recruiting sergeant for the Taliban.