Pakistani police escort arrested US diplomat Raymond Davis (C), to a court in Lahore (file photo - January 28, 2011)
Pakistani police escort arrested US diplomat Raymond Davis (C), to a court in Lahore (file photo - January 28, 2011)

Pakistani officials say a detained CIA contractor accused of killing two Pakistanis has been released.

Punjab provincial law minister Rana Fanaullah told Pakistan's GEO TV that Raymond Davis, 36, was first formally indicted on double murder charges in Lahore on Wednesday. However, during the proceedings, relatives of the victims said they agreed to accept compensation in exchange for his release.

The American was accused of shooting and killing two men in the eastern city of Lahore on January 27 during what U.S. officials say was an attempted robbery.  

The United States had demanded Davis's release, saying he has diplomatic immunity.  
The case inflamed tensions between the CIA and Pakistan's military spy service, the ISI.