Pakistani officials and Taliban-linked militants say they are close to signing a peace deal that would establish an Islamic system of justice in the Swat Valley.
A spokesman for the militant group announced a 10-day cease-fire in the northwestern valley ahead of Monday's expected signing of the agreement in Peshawar.
The spokesman, Muslim Khan, said his group freed a Chinese hostage on Saturday as a goodwill gesture for the peace talks.
Chinese state media say the engineer, Long Xiaowei, arrived safely at the Chinese embassy in Islamabad early Sunday after six months of captivity.
Local Pakistani officials said Sunday that they are close to an agreement brokered by Taliban sympathizer Sufi Muhammad that would impose Islamic law in the Malakand region that includes the Swat Valley.
Muhammad, a militant leader who fought in Afghanistan, was freed last year under another peace deal with tribal elders in northwestern Pakistan.
His son-in-law, pro-Taliban cleric Maulana Fazlullah, is waging a violent campaign for a strict interpretation of Sharia law in the region and has destroyed many girls' schools.
The government struck a peace deal with Fazlullah last year, but the militants have continued their attacks. They are now largely in control of Swat Valley, a former tourist haven.
Separately, United Nations officials are trying to contact the kidnappers of American John Solecki, a U.N. refugee agency employee captured in southwestern Pakistan nearly two weeks ago.
Soecki's kidnappers say they are from a previously unknown group - the Baluchistan Liberation United Front. On Friday, they threatened to kill Solecki within 72 hours unless 141 ethnic Baluch women allegedly held in Pakistan were released.
Pakistan's Interior Ministry chief Rehman Malik says he not aware the women are detained.
Some information for this report was provided by AFP, AP and Reuters.