He said Hussain had prepared an agreement under which Ghazi was to be briefly held in protective custody, and the government would agree to free the students. Only those being sought by police were to be detained.

"We were happy and hoping that the nation will hear a good news, but the government changed almost all clauses of the draft agreement," he told The Associated Press. "We were stunned on seeing changes in the draft agreement, and we don't know why the government did so."

"The government is responsible for today's bloodshed."

Hussain rejected the claim that the president's office had made changes to the draft.

"No this is not correct," he said.

Ul-Haq said the negotiations broke down on the issue of what would happen to foreign militants within the compound.

The minister said that during the talks, Ghazi suddenly asked what would happen to the foreign militants. The government side, he said, responded that they would be dealt with according to the law.

"On hearing it, Ghazi stopped the telephone conversation," ul-Haq said.

He said it was the first time that Ghazi acknowledged that foreign militants were present inside the mosque.

Several loud explosions were heard just as the vexed looking delegates were getting into their cars and sporadic shooting was also heard.

About two dozen relatives of people trapped inside the complex waited anxiously at the army cordon during the assault.

The government has said wanted terrorists are organizing the defense of the mosque, while Ghazi has accused security forces of killing scores of students.

In his comments on Tuesday, Ghazi said he had offered to show the mediators that they had no heavy weapons, foreign militants or other wanted people inside the mosque.

The siege has given the neighborhood the look of a war zone, with troops manning machine guns behind sandbagged posts and from the top of armored vehicles.

It has also sparked anger in Pakistan's restive northwest frontier. On Monday, 20,000 tribesmen, including hundreds of masked militants wielding assault rifles, held a protest in the frontier region of Bajur.

Many chanted "Death to Musharraf" and "Death to America" in a rally led by Maulana Faqir Mohammed, a cleric wanted by authorities and who is suspected of ties to al-Qaida No. 2 leader Ayman al-Zawahri.

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