Oh boy, what a tale of tricks this is turning out to be!
I'll just give you the simplistic overview:
Raymond Davis, a private security contractor "on the rolls of the US diplomatic mission in Pakistan" shot dead two men while a US diplomatic car ran over and killed another while racing to the rescue of Davis. Bald facts.
Davis is claiming self-defence against intended robbery. Pakistan police have said he shot them in cold blood.
'Meanwhile, Shumaila Kanwal, the wife of one of alleged robbers/spies died under mysterious circumstances in a Pakistani hospital after consuming poison, but not before she met journalists and issued a revenge call, demanding "blood for blood'.'
Behind the scenes:
Washington has been trying to pressurise Pakistan over the Nov 2008 Mumbai attacks - a US court is trying to summon top ISI officials in connection with the attacks (ISI is the Pak intelligence agency).
It now turns out that the dead Pak men were ISI agents. "Matters have been complicated by new disclosures that the two were ISI agents assigned to tail Davis and the subsequent suicide by the widow of one of the men demanding rough justice for Davis, just as it seemed the Pakistani government was inclined to release him under US pressure."
"Washington has remained mum on the details of the murky episode, except to indicate that it regards Davis as such a prized assets that it is willing to go to any extent to extricate him. "
US has cut all diplomatic contact with Pakistan, demanding that Davis and his colleague be released under diplomatic immunity.
US congressmen (from the Republicans) have told Pakistan leaders there will be no money to Pak in the upcoming US Budget if these men are not released.
US needs Pak to transport resources to Afghanistan. Pak desperately need US money to survive.
What happens next?