The announcement came as three missiles believed fired from a U.S. drone aircraft destroyed a house used by a local Taliban commander elsewhere in the northwest, killing 30 people, witnesses said.
The cease-fire, in Pakistan's Swat Valley hundreds of miles from the missile strike in Kurram, will likely concern the United States, which has warned Pakistan that such peace agreements allow al Qaeda and Taliban militants operating near the Afghan border time to rearm and regroup.
The truce announcement came after talks with local Islamists, including one closely linked to the Taliban.
60 Minutes' correspondent Steve Kroft recently spoke with the new president of Pakistan, Asif Ali Zardari, who candidly admitted that the government had
" Everybody was in denial that they're weak and they won't be able to take over. That, they won't be able to give us a challenge. And our forces weren't increased. And therefore we have weaknesses. And they are taking advantage of that weakness," Zardari said of the Taliban.
Speaking in India, U.S. special envoy to Afghanistan and Pakistan Richard Holbrooke said the unrest in Swat was a reminder that the United States, Pakistan and India face an "an enemy which poses direct threats to our leadership, our capitals and our people."
Amir Haider Khan Hoti, the chief minister for the North West Frontier Province, said authorities would impose Islamic law in Malakand region, which includes the Swat Valley. Swat is a one-time tourist haven in the northwest where extremists have gained sway through brutal tactics including beheading residents, burning girls schools and attacking security forces.
He said the laws would only be implemented when the valley was peaceful.
The Swat Taliban said Sunday they would observe a 10-day cease-fire in support of the peace process. They welcomed Monday's announcement, which did not mention any need for the militants to give up arms.
"Our whole struggle is for the enforcement of Shariah (Islamic) law," Swat Taliban spokesman Muslim Khan said. "If this really brings us the implementation of Shariah, we will fully cooperate with it."
Hoti gave few details, but said the main changes were included in existing laws stipulating Islamic justice that have never been enforced. They allow for Muslim clerics to advise judges when hearing cases, but do not ban female education or mention other strict interpretations of Shariah espoused by the Taliban in Pakistan and Afghanistan.
"This was the people's demand ... for speedy justice." he said. "There was a (legal) vacuum and we will be filling that vacuum in the near future," he told a news conference.
Hoti also said troops in Swat, which had been conducting an offensive there against the militants, would now go on "reactive mode" and retaliate only if attacked.
Pakistani military officials were not immediately available for comment.
The missile attack Monday was the first known such strike in Kurram. Most of the strikes have occurred in South and North Waziristan, other tribal regions considered major Taliban and al Qaeda strongholds.
Rehman Ullah, a resident of the targeted village of Baggan, said drones were seen in the sky before the attack and that he saw 30 bodies dug up. An intelligence official said field informants reported that militants showed up at the village bazaar and ordered 30 caskets. He spoke on condition of anonymity because he was not authorized to speak to media.
The U.S. has stepped up missile strikes in the border region since August, killing some suspected top militants. Pakistan routinely protest the strikes, saying it undercuts its fight against terror.
Regaining the Swat Valley from militants is a major test for the Pakistani government. Unlike the semiautonomous tribal regions where al Qaeda and Taliban have long thrived, the former tourist haven is supposed to be under full government control and lies less than 100 miles (160 kilometers) from the provincial capital, Islamabad.
Among those Islamists taking part in talks with the government in the provincial capital Peshawar was Sufi Muhammad, who Pakistan freed last year after he agreed to renounce violence. Muhammad is father-in-law to Maulana Fazlullah, leader of the Taliban in Swat.
Hoti said Muhammad had agreed to travel to Swat and urge the militants to give up their arms.
"Seeing the trend we can hope peace will soon be restored in Swat," he said.
President Asif Ali Zardari has been indirectly involved in the dialogue after growing increasingly concerned about civilian casualties in Swat, said an official in the president's office who requested anonymity because he was not authorized to release the information.
Overall security is deteriorating in Pakistan, and several foreigners have been attacked or abducted in recent months.
Also Monday, a spokesman for kidnappers holding American John Solecki captive in Pakistan said the deadline to negotiate for his release was extended for a "few days" after appeals from "some international organizations." On Friday, the captors said they would kill Solecki, a United Nations official, in 72 hours if their demands were not met.
Solecki was abducted on Feb. 2 in Quetta, a major city in the southwest near the Afghan border. On Friday, his kidnappers threatened to kill him within 72 hours and issued a 20-second video of the blindfolded hostage.
Shahak Baluch, who claims to speak for the little-known Baluch United Liberation Front, announced the extended deadline in a call to the Quetta Press Club.
The group's name indicates a link to separatists rather than Islamic extremists. Its demands include the release of 141 women allegedly held by Pakistani authorities, but Pakistan has denied it is holding the women.
The U.N. has been trying to establish contact with the kidnappers, officials said.