Troops and insurgents have been observing a truce in the Swat valley since Feb. 15, when Pakistani authorities offered to introduce Islamic law in the region if militants lay down their arms. A hard-line cleric is negotiating a possible deal with the militants on behalf of the government.
The Taliban cease-fire was due to expire on Wednesday, but spokesman Muslim Khan told CBS News insurgent leaders decided at a meeting convened Monday by regional boss Maulana Fazlullah to extend it "for an indefinite period."
Khan told CBS News' Sami Yousafzai via telephone that the militant movement would also be releasing, "all prisoners, completely and unconditionally."
"Today we released seven soldiers and we will release the rest of the security personnel in our detention as a goodwill gesture," he said.
Khan's statement came on the heels of an announcement Monday by a Taliban commander that the militant group was toin the northwestern Bajur region, where Pakistani troops have won a series of victories over the armed group.
Pakistani officials say the offer to introduce Islamic law in Swat and surrounding areas addresses long-standing demands for speedy justice that have been exploited by the Taliban, which residents say now control much of the region.
But NATO and the United States have voiced concern that any peace accord could effectively cede the valley to militants who have defied a yearlong military operation, beheaded opponents and bombed girls' schools.
Khan told CBS News that the Pakistani Taliban movement was not interested in the "criticism of the west and the U.S.A."
Many analysts doubt the Taliban will accept the mild version of Islamic law on offer - or that they will loosen their grip on the valley, which lies just 100 miles from the capital, Islamabad. A deal last year collapsed after several months.
"We are fully committed to our promises and the government must keep its promise, too. The government broke its commitment and truce last year. If it does it again it would be unfortunate and a tragedy for the government," warned Khan.
Khan said girls would be permitted to attend school and to work in Swat, provided they were wearing the requisite full headscarf, or hijab, as they did so.
Swat, a steep-sided valley once popular with tourists, lies close to Pakistan's lawless tribal belt, from where Taliban and al Qaeda militants launch attacks into.
Pakistan's pro-Western government has defended the Swat peace initiative as a chance to weaken the insurgency threatening both countries. It insists it will come down hard on militant groups who refuse to renounce violence and halt cross-border attacks in return for reconciliation.
A local Taliban commander in Swat, Qari Subbanullah, told Yousafzai by phone that he was happy to lay down his weapon "as we get acknowledged by our leaders," but he cautioned that it "would be my pleasure to get called back to pick up my gun and fight for the cause of Sharia law," should the truce fail.
"The Taliban did not go begging for this deal. The government did not have any other option except signing the Sharia implementation deal," said Subhanullah
"Locals are so happy (with our control in Swat), and it's a shame that within the Islamic Republic of Pakistan we are demanding Islamic law and the Pakistani army is shelling and killing us. What is our crime?" asked the commander rhetorically.
American officials have expressed skepticism about the willingness and ability of Pakistan's security forces to regain control of the country's border areas, and have ratcheted up U.S. missile strikes on al Qaeda targets in Pakistani territory.
Pakistan's army chief and foreign minister are holding talks in Washington this week as the new U.S. administration hammers out a new policy for the region.