This story was filed by CBS News' Farhan Bokhari.
ISLAMABAD - Pakistan's government has decided to grant diplomatic immunity to Raymond Davis, a U.S. official arrested in the city of Lahore for the murder of two young Pakistani men on Jan. 27, a high-ranking government official told CBS News on Wednesday.
Davis' fate, however, will eventually be decided by a Pakistani court in Lahore, where he faces murder charges over the incident.
"I have every hope the court will base its proceedings on our opinion. If he is immune from prosecution because we have recognized him as a diplomat, then a prosecution in Pakistan will be difficult," said the official, who spoke to CBS News on the customary condition of anonymity.
President Obama weighed-in on the diplomatic spat Tuesday, calling the claim that Davis might not be able to claim diplomatic immunity "untenable".
On Tuesday, Sen. John Kerry, chairman of the U.S. Senate Foreign Relations Committee, flew into Pakistan for meetings with the country's leaders as the Obama administration raised pressure on Islamabad to release Davis on the grounds of diplomatic immunity.
A U.S. official in Washington told CBS News that Kerry's visit was purely as an individual, "who cares about Pakistan and is visiting as a friend," but Pakistani officials said the visit was primarily to do with Davis.
"We recognize Sen. Kerry as a friend and supporter of Pakistan. He is indeed here to help find a resolution to the Raymond Davis issue," said the senior Pakistani official who spoke Wednesday to CBS News. A second Pakistani official confirmed that the government had decided to grant Davis immunity.
"I realize this is a very, very tough decision which is bound to provoke strong reaction on the streets of Pakistan," acknowledged the official. "Opponents of the (Pakistani) government will denounce the grant of immunity as a sell-out of national honor."
"Our leaders have decided Pakistan's relations with the U.S. cannot be allowed to derail because of this episode," added the official.
On Tuesday, a keythat Davis' release would prompt fresh street protests. Liaquat Baloch, a prominent leader of the Jamaat-i-Islami party -- the main Islamic political faction in Pakistan, said Davis "has to be put on trial in Pakistan and sentenced for murder if found guilty. That is the law of Pakistan. Any deviation from our law will be demonstration of a double standard."