FILE - In this Jan. 28, 2011, file photo, Pakistani security officials escort Raymond Allen Davis, center, to a local court in Lahore, Pakistan....
(AP Photo/Hamza Ahmed, File)
FILE - In this Jan. 28, 2011, file photo, Pakistani security officials escort Raymond Allen Davis, center, to a local court in Lahore, Pakistan. Officials say on Wednesday, March 16, 2011 an American CIA contractor detained on suspicion of murder has been released after families of the two Pakistanis he killed pardoned him in exchange for compensation. Davis has been in jail since Jan. 27, seriously straining ties between Pakistan and the United States.
LAHORE, Pakistan — A CIA contractor who shot and killed two Pakistani men was freed from prison on Wednesday after the United States paid $2.34 million in "blood money" to the victims' families, Pakistani officials said, defusing a dispute that had strained ties between Washington and Islamabad.
In what appeared to be carefully choreographed end to the diplomatic crisis, the U.S. Embassy said the Justice Department had opened an investigation into the killings on Jan. 27 by Raymond Allen Davis. It thanked the families for "their generosity" in pardoning Davis, but did not mention any money changing hands.
The killings and detention of Davis triggered a fresh wave of anti-American sentiment in Pakistan and were testing an alliance seen as key to defeating al-Qaida and ending the war in Afghanistan.
The tensions were especially sharp between the CIA and Pakistan's powerful Inter Services Intelligence Agency, which says it did not know Davis was operating in the country. One ISI official said it had backed the "blood money" deal. There appeared to be little public backlash as night fell in Pakistan.
Davis claimed he acted in self-defense when he killed the two men on the street in the eastern city of Lahore.
The United States had insisted Davis was covered by diplomatic immunity, but the weak government here, facing intense pressure from Islamist parties, sections of the media and the general public, refused to acknowledge the protection.
The payment of "blood money", sanctioned under Pakistani law, had been suggested as the best way to end the dispute.
Given the high stakes for both nations, few imagined either side would allow it to derail the relationship. The main question was how long it would take to reach a deal.
Punjab Law Minister Rana Sanaullah said Davis was charged with murder Wednesday in a court that was convened in a prison in Lahore, but was immediately pardoned by the families of the victims after the payment.
Reporters were not allowed to witness the proceedings.

WELL THERE WE GO GETTING INTO SOMEBODIES BUSINESS AGAIN AND USING "BLOOD MONEY" TO GET THEM OUT OF JAIL.