Feb. 16 (Bloomberg) -- Pakistan agreed to impose Islamic law in the Swat Valley after reaching a peace accord with local Taliban who pledged, in return, to end fighting in the area. This is the second peace accord in less than 12 months.

“We have agreed to end all non-Islamic laws in the region,” Ameer Haider Khan Hoti, chief minister of the North West Frontier Province, which governs the valley, said in a televised news conference from Peshawar, the provincial capital. “The new laws will be implemented as soon as the government’s writ is established.”

The peace agreement aims at ending 20 months of fighting between security forces and militants led by local cleric Sufi Muhammad, which has left hundreds dead and many homeless. The last peace agreement in May, ended after two months with both sides accusing each other of violating the accord.

“Peace will be as fragile and vulnerable as last time,” said Khalid Mahmud, a political analyst at the Institute of Regional Studies in Islamabad. “The terms by the Taliban seem very strict and appear difficult for the government to follow.”

Once the peace accord is implemented, the army will be called back from Swat, Prime Minister Yousuf Raza Gilani told reporters in Islamabad today. During the implementation of the accord, security forces will be in “reactive mode” and will only respond if attacked by militants, Hoti said.

“We hope the cease-fire announced by the militants lasts forever,” he said. Militants declared a 10-day cease-fire yesterday in anticipation of the peace accord.

Lay Down Arms

The agreement, approved by President Asif Ali Zardari, was signed by Hoti and representatives of cleric Muhammad in Peshawar today. The government expects the militants to lay down their arms since their demands have been met, Hoti said.

Swat Valley, 250 kilometers (155 miles) north of the capital, Islamabad, was once a popular tourist destination. Since the fighting began, militants destroyed more than 150 schools and banned education for girls in their area. They also attacked hotels and security forces personnel.

President Barack Obama’s new administration is pressing Pakistan to root out al-Qaeda and Taliban militants sheltering in the northwestern tribal zone on the border with Afghanistan. U.S. intelligence agencies say the region is a haven for extremists who carry out attacks on international forces in Afghanistan.

Zardari’s coalition government, led by the Pakistan Peoples Party, says it’s doing all it can against the guerrillas. The government has deployed paramilitary troops in Swat and the nearby tribal region to combat militants.

The Pakistani Taliban is led by Baitullah Mehsud, who was allegedly behind the December 2007 assassination of Zardari’s wife, former Prime Minister Benazir Bhutto, according to Pakistan’s previous government.

To contact the reporter on this story: Khalid Qayum in Islamabad at kqayum@bloomberg.net

Last Updated: February 16, 2009 05:22 EST