- Associated Press - Thursday, March 3, 2011

LAHORE, Pakistan | A Pakistani court said Thursday it would proceed with the trial of an American CIA contractor arrested for fatally shooting two Pakistanis, but it held off on charging him, lawyers for both sides said. They said the court also said there was no evidence that Raymond Allen Davis had diplomatic immunity as his lawyers and Washington insist.

The decision was a blow to Washington, which says Raymond Allen Davis is considered a diplomat and has protected status from prosecution. The immunity issue, however, is still being considered by the Lahore High Court, which could override Thursday’s finding by the trial court.

The case has severely strained the relationship between the U.S. and Pakistan, whose alliance is considered a critical part of ending the war in Afghanistan. The U.S. government insists Mr. Davis was acting in self-defense against robbers. The Pakistani government, fearful of public backlash, has yet to make a determination on whether Mr. Davis has immunity and said the matter is up to the courts.

Mr. Davis appeared for the first time with defense counsel during Thursday’s hearing.

“The court did not stop the trial on the basis of immunity,” said his attorney, Zahid Bokhari, after the morning proceeding.

Asad Manzoor Butt, a lawyer representing the victims, said the next court hearing was set for March 8. The Lahore High Court is expected to take up the immunity question again on March 14.

In Washington, State Department spokesman P.J. Crowley said the U.S. is “concerned that the proceedings are ongoing.” He said U.S. officials “continue to stress to the Pakistani government and to the Pakistani courts that he has full immunity from criminal prosecution.”

U.S. officials initially described Mr. Davis as a consulate or embassy employee but have since said on condition of anonymity that he was doing security work in Pakistan as a contractor for the CIA. They have said that does not make any difference to his right to diplomatic immunity.

Last month, President Obama referred to him as “our diplomat” and demanded he be freed.

Along with the two men Mr. Davis shot, a third Pakistani was killed when struck by a U.S. car rushing to aid the American on Jan. 27 in the eastern city of Lahore.

Some members of Congress are threatening to cut off development funds to Pakistan if Mr. Davis is kept much longer in jail. Mr. Obama, seeking to enlist Pakistan’s support in helping it fight the Taliban in Afghanistan, has authorized the release of $7.5 billion in aid over five years to shore up the country.

The case also has inflamed tensions between the CIA and Pakistan’s Inter-Services Intelligence agency. Both agencies do not speak to the media in detail about their operations, but it appears the ISI is either angry at the CIA for carrying out activities in the country without its knowledge or is embarrassed at being caught allowing the agency to operate apparently independently.

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