WASHINGTON - The United States has so far not taken any position on the Swat peace agreement, saying it is watching the situation and looking out for results that Pakistan's strategy yields. "No we leave it where we had it yesterday. We are watching the situation, we are in discussions and in contact with the government of Pakistan, and we will see what the results of their policy will be," deputy spokesman of the State Department Gordon Duguid told the daily briefing on Wednesday. But some media reports say that the accord with Taliban fighters that would impose Sharia law on the strategic valley looms as a setback for the Obama administration's hopes to mount a united front against militants there and in Afghanistan. "It is definitely a step backwards," James Dobbins, the Bush administration's first envoy for Afghanistan, was quoted as saying in media reports. "The Pakistanis have to take a stronger line with extremists in the region." But the administration has responded carefully to the peace move, which Islamabad says will help bring peace to the restive valley, where security forces have been fighting militants for several months. On Tuesday, the spokesman indicated some US understanding of the Pakistani position while commenting on the question of introduction of Shariah. He said Islamic laws are within the constitutional framework of Pakistan and wondered if it could be an issue for anyone in the outside world. The spokesman said special envoy Richard Holbrooke has returned from his first South Asian visit that took him to Pakistan, Afghanistan and India - and is preparing for his briefings to Secretary Hillary Clinton and President Barack Obama, both of whom are travelling at the moment.