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A Pakistani court refused today to release an American official to US authorities, igniting a diplomatic rift between the two countries as well as speculation about the official’s role within the American government.

Embassy employee Raymond Davis is accused of murdering two Pakistan citizens in Lahore last Thursday as The Christian Science Monitor reported then. However, he has claimed that he was acting in self-defense after two men on a motorcycle attempted to rob him at gunpoint, according to a BBC report.

The State Department released a statement saying that Pakistani authorities are obliged to hand over Mr. Davis because he has diplomatic immunity.

“He is a member of the embassy’s technical administrative staff and therefore entitled to full criminal immunity. He cannot be lawfully arrested or detained in accordance with the Vienna Convention,” said State Department spokesman Philip Crowley on Monday, according to an AFP report.

Crowley added that the US government agreed with its employee’s claim that he was acting out of self-defense when confronted by two armed men.

However, according to Pakistani English-language newspaper Dawn, the Pakistani government will decide whether Davis has diplomatic immunity in this situation – not the US.

“I am restraining him [from being handed over to US authorities]. Whether he has or does not have [diplomatic] immunity will be decided by the court,” said Lahore High Court Chief Justice Ejaz Ahmed Chaudhry, in the Dawn report.

The newspaper also quoted local lawyer Khawaja Haris, the advocate general for Punjab province, including its capital Lahore, saying that the “Vienna Convention provides immunity to diplomats ‘within certain limits’.”

"The federal government has to give a certificate on whether the man has diplomatic immunity or not and whether his diplomatic status is confirmed or not,” Haris said. “What we hear about him and his immunity is through the press only. Since he is involved in a grave crime, this issue has to be decided by the court.”

When a visiting US congressional delegation asked President Asif Ali Zardari on Monday to intervene in Davis’s case, Mr. Zardari denied that he had any power in the issue, according to Pakistani newspaper The Nation.

“It would be prudent to wait for the legal course to be completed,” Zardari said, according to The Nation.

However, the Associated Press noted that local officials in Punjab province claimed the opposite. They said that Davis’s immunity was to be decided by the federal government. If he is not protected by diplomatic immunity, provincial prosecutors said they will pursue murder charges.

Chaudhry demanded that the federal government determine whether the American has diplomatic immunity within 15 days and said he would review the final decision himself. But Azhar Sadique, a senior constitutional lawyer, said the court was overreaching – behaviour for which it has been criticised in the past. "As far as the issue of diplomatic immunity is concerned, this issue must be decided by the two [national] governments or by the international court of justice," said Sadique.

According to the AP report, several indicators point to the fact that Davis may be a CIA officer, which explains the confusion surrounding his case. The US government has not explained why Davis was carrying a gun or clearly stated his job at the embassy, reports The Christian Science Monitor referring to him as a part of "technical or administrative staff."

Pakistan is a crucial US ally in the war against terror, but anti-American sentiment and anger at the government for its close ties with America are widespread in the country. Analysts believed that this could further strain ties, according to the Monitor.