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"We welcome the announcement by the Government of Pakistan of its plans to reinstate former Chief Justice Iftikhar Mohammed Chaudhry," the US Embassy in Islamabad said in a statement.
"This is a statesmanlike decision taken to defuse a serious confrontation, and the apparent removal of this long-standing national issue is a substantial step towards national reconciliation," it said.
Pakistan Prime Minister Yousuf Raza Gilani announced on Monday that government's decision to reinstate Chaudhry and other judges sacked in 2007 by then President Pervez Musharraf during Emergency.
President Asif Ali Zardari had come under massive pressure to defuse a standoff with main opposition PML-N leader Nawaz Sharif, who led a mass movement demanding reinstatement of sacked judges.
"Now is the time for all Pakistanis and their political representatives to work together, with the support of their friends and allies, to peacefully strengthen their democracy and ensure a positive dialogue as they move forward to deal with the many issues confronting them," the US embassy statement said.


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National reconciliation, my foot ! Zardari was kicked in the backside by Nawaz Sharif and humiliatingly made to honour a commitment on the judges that he had dishonourably reneged on. Zardari, of course, is a man without any decncy in him. Had he an iota of character or self-respect in him, he would have resigned by now. Zardari has proved that he cannot be trusted in the least. That he will cooperate in the country's interest is too much to expect. He cannot think beyond his personal interest. Meanwhile, where is Musharraf? Fearing a backlash on him, he must have fled the country.
Thank God. Wisdom has finally dawned on the Ruling party in Pak. Now they must unite against Jihadis and extreemists so that democratic institutions can effectively play their role.