Pakistan's government has given in to opposition demands and announced the reinstatement of the sacked chief justice Iftikhar Chaudhry.
There are fears that Pakistan could return to the instability of the 1990s
The decision prompted lawyers and the main opposition Pakistan Muslim League-Nawaz (PML-N) to call off a major rally in the capital.
The government led by the Pakistan People's Party (PPP) had earlier clamped down on protests, with the PML-N accusing it of behaving in the same undemocratic way as President Pervez Musharraf before he resigned in August 2008.
Why have the PPP and the PML-N fallen out?
Although the two parties worked together to remove President Musharraf in August 2008, relations between them were seldom more than cordial.
The PML-N is strongly supported in Punjab province
The parties formed a brief alliance following parliamentary elections in February 2008, but agreement was never reached over contentious issues simmering under the surface.
The PML-N withdrew from the alliance in August 2008, complaining that the PPP was dragging its feet over the question of reinstating the former chief justice of Pakistan, Iftikhar Chaudhry, and other judges who were sacked by President Musharraf.
The PML-N said it was also unhappy over PPP leader and President Asif Ali Zardari's decision to run for president which it said was in violation of an agreement that the next holder of the office would be a non-partisan individual.
Relations were further strained over a Supreme Court decision in February 2009 to ban PML-N leader Nawaz Sharif and his brother Shahbaz from holding elected office, coupled with the decision of President Zardari to implement direct rule in their stronghold in the province of Punjab.
What will happen next?
Following the news that Justice Chaudhry is to be reinstated, the stand-off seems to have been averted for now.
Announcing that the march on Islamabad had been called off, Mr Sharif urged supporters to celebrate "with dignity".
The announcement has also pleased the US. The unrest had alarmed the West, which wanted Pakistan to focus on the battle against the Taleban on the Afghan border.
There are indications that other issues that inflamed tensions between the two will be resolved: the ban on the Sharifs holding elected office and direct rule in Punjab.
But correspondents say the government has bought only temporary peace by announcing the reinstatement of Justice Chaudhry.
What will be the PPP's strategy to deal with the rift?
The government tried to head off the PML-N protests by detaining or containing the movements of its senior leadership.
That failed to work.
Analysts say in the long term President Zardari will have to decide how to deal with the PML-N.
The crackdown against opposition leaders resulted in accusations that the president was weakening Pakistan's democracy and Mr Zardari's reputation has taken a blow.
Many observers have also questioned Mr Sharif's motives for pursuing the protest campaign, saying he has aims other than simply restoring the judges.
There are fears the two parties - bitter political adversaries throughout the 1990s - could return to the see-saw political turmoil that so characterised their relationship in that decade.
How much power does President Zardari have?
The present constitution confers vast powers on the president, including the power to appoint services chiefs, the head of the election commission and the head of the public service commission.
But the most controversial prerogative is the power to dismiss all or any of the central or provincial governments and parliaments.
These powers were included in the constitution by Mr Musharraf and the ruling alliance had indicated it would do away with them.
But the president continues to have them until the parliament votes them out by a two-thirds majority.
Why did the government take so long to reinstate Mr Chaudhry?
The PPP argued that it had already reappointed all but a handful of the judges sacked by President Musharraf. But it argued that some of them, including Iftikhar Chaudhry, should not be restored to their former positions.
One reason for that may be because Mr Chaudhry last year challenged an amnesty that enabled Mr Zardari to end his exile and return to Pakistan.
Some analysts pointed out that the Americans were also averse to Justice Chaudhry's reinstatement because he was likely to reopen the cases of missing persons.
These included people alleged to have supported al-Qaeda who were handed over to the US by the Pakistani security agencies.
A third argument was that Justice Chaudhry had "disqualified" himself for the job by indulging in street politics since his dismissal.
Analysts say the decision to reinstate Mr Chaudhary will not be welcomed by the country's powerful army, which has made no secret over the years of its disdain for his investigations into alleged human rights abuses committed by the military.
Will the army make a comeback?
The army has dominated Pakistani politics directly or indirectly since the mid-1950s and has come to exert influence even in such sectors as the civilian administration, the police and the national economy.
The army remains one of Pakistan's few properly functioning institutions
Partly because of this, and partly because of the defeats it suffered in Kargil in 1999 against Indian troops and later against militants in the north-western tribal region, it has grown extremely unpopular.
The unpopularity of Mr Musharraf's regime further dented its standing with the people.
With Mr Musharraf's resignation, the army appears to have completely withdrawn from the political field.
It is currently under pressure from Western powers because of its failure to contain militancy.
And a vibrant Pakistani electronic media is not shy of exposing and criticising the military's "political misadventures".
In spite of all this, the army still remains the most organised institution in the country and may feel it has to get involved in politics again if the politicians fail to steer Pakistan through its myriad problems.
What about the militant threat?
In recent years, militant sanctuaries in the tribal areas have gradually spread across government territory in the north-west where they have established their own system of justice and revenue collection.
Militants became much more active during Mr Musharraf's tenure
They now present arguably the greatest threat to President Zardari's government.
He has continued the policy of his predecessor in relation to the insurgents - signing ceasefires in some areas while launching all out assaults against them in others.
But the attack on the Sri Lankan cricket team by militants in Lahore in March 2009 showed just how powerful the militants have become - and how weak and poorly prepared are the authorities.
President Zardari must trim a full in-tray if he is to remain in power.
He must dampen the militant threat, ward off opposition parties and tackle an economic crisis that some have warned my bankrupt his country.