'Serious concerns'

The announcement came after 27 Pakistan soldiers and officers were killed in a Taliban ambush on a Pakistan military convoy in North Waziristan.

Al Jazeera's Kamal Hyder, reporting from Pakistan, said there were "serious concerns that the deal may be off" following the attack.

Pulling out of the peace deal, reached in February 2008, has raised the prospect of wider unrest as the Pakistani army extends its efforts to crush the Taliban.

US officials have criticised peace deals with the fighters or tribes representing them in the border region, saying they allow the Taliban to gain strength.

The agreement in North Waziristan had appeared to keep things relatively peaceful there - calmer than in neighbouring South Waziristan, where the army is preparing for a major offensive against Pakistani Taliban chief Baitullah Mehsud.