MINGORA, Pakistan -- NATO led a growing chorus of international concern Tuesday when it warned a truce between the government of Pakistan and Taliban militants in a restive region near the Afghan border risks giving the extremists a "safe haven."

A hard-line cleric sent to the battle-scarred Swat valley to negotiate with the Taliban received a hero's welcome there by crowds shouting "Long live Islam! Long live peace!"

The cleric, Sufi Muhammad, expressed hope the militants would give up their arms to honor the pact, which imposes Islamic law and suspends a military offensive in the former tourist haven and nearby areas.

NATO has 55,000 troops in Afghanistan, and many face attacks by Taliban and al-Qaida fighters believed to find refuge in pockets of Pakistan's northwest.

In the last few months, Swat has largely fallen to militants who have beheaded opponents, burned scores of girls' schools and banned many forms of entertainment. Gunbattles between security forces and militants have killed hundreds, while up to a third of the valley's 1.5 million people have fled.

The truce "is certainly reason for concern," NATO spokesman James Appathurai said in Brussels. "We should all be concerned by a situation in which extremists would have a safe haven. Without doubting the good faith of the Pakistani government, it is clear that the region is suffering very badly from extremists and we would not want it to get worse."

Britain also weighed in with reservations.

"Previous peace deals have not provided a comprehensive and long-term solution to Swat's problems," the British High Commission in Islamabad said. "We need to be confident that they will end violence -- not create space for further violence."

Secretary of State Hillary Rodham Clinton said in Japan that the agreement still needed to be "thoroughly understood."

A senior U.S. Defense Department official, however, said "it is hard to view this as anything other than a negative development." He requested anonymity because of the sensitivity of relations with Pakistan and because he was not authorized to speak on the record.

The provincial government in northwest Pakistan announced the deal Monday after it met with Islamists led by Muhammad, who has long demanded Islamic law be followed in this corner of Pakistan.

As part of the deal, the pro-Taliban cleric agreed to travel to Swat and discuss peace with Maulana Fazlullah, his son-in-law and the leader of the Swat Taliban. Muhammad and his convoy of 300 vehicles arrived in Swat's main city of Mingora on Tuesday as hundreds of jubilant residents lined the roads and shouted slogans. Many of those in the convoy with him wore black turbans -- a Taliban trademark.

"We will soon open dialogue with the Taliban. We will ask them to lay down their weapons. We are hopeful that they will not let us down," Muhammad told reporters. "We will stay here in the valley until peace is restored."

Muhammad was detained in 2002 after he sent thousands of volunteers to fight the U.S. in Afghanistan, but Pakistan freed him last year after he agreed to renounce violence. It is unclear how much influence he has over Fazlullah or exactly where and when they would meet.

The Swat Taliban said Sunday they would observe an initial 10-day cease-fire as a goodwill gesture.

Pakistan's inability to regain Swat has embarrassed the shaky civilian government. However, Pakistani leaders insisted the deal was not a concession, but an attempt to fulfill demands by locals for a more efficient justice system.

"Those who want to live in a peaceful world will take steps like ours, and those who want to live in a violent world will take opposite steps," said Mian Iftikhar Hussain, information minister for the North West Frontier Province. "The need of the hour is to put water on fire, not to fuel it."

Similar deals have failed in the past, including one last year in Swat that was blamed for giving insurgents time to regroup.

Federal Information Minister Sherry Rehman insisted President Asif Ali Zardari would not sign off on the agreement "until peace is restored in the region." The Swat Taliban, meanwhile, have said they will stop fighting once Islamic law is in place.

Some 2,000 militants are believed to operate in the valley, and, in defiance of the presence of some 10,000 paramilitary and army troops, they have already set up their own courts, meting out punishments in line with an exceptionally harsh brand of Islamic law.

Officials said the main changes to the legal system will involve existing -- but unenforced -- laws that allow for Muslim clerics to advise judges when hearing cases and the setting up of an Islamic appeals court. The rules do not ban female education or contain other strict interpretations of Shariah often adhered to by many Taliban.

Human rights activists were still wary.

"The government is reneging on its duty to protect the human rights of people from Swat Valley by handing them over to Taliban insurgents," said Sam Zarifi, Amnesty International's Asia-Pacific director.

Elsewhere in northwest Pakistan, a car bombing occurred near the home of local government official Fahimur Rehman on the outskirts of Peshawar city. Rehman said six people died while 14 were wounded. In Bajur tribal region, security forces killed seven militants, while militant rocket fire killed three people, said Farooq Khan, a senior local official.

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Associated Press writers Slobodan Lekic in Brussels, Riaz Khan in Peshawar and Habib Khan in Khar contributed to this report.