ISLAMABAD: Pakistan forged ahead with a severely strained peace deal with Taliban militants, announcing a new Islamic appellate court for part of its northwest. But a cleric mediating the pact rejected the panel yesterday.

The developments came as the military was fending off Taliban fighters in a district near the Pakistani capital and underscored ambivalence in the country about what approach is best for dealing with extremists.

Under the peace deal struck in February, the government agreed to impose Islamic law in the Swat Valley and surrounding areas that make up the Malakand Division.