The details of the deal are unclear. Mohammad Tahir-ul-Qadri’s supporters want the government to resign ahead of elections due to be held in May.
Pakistan was thrown into crisis on Tuesday by the protests and a court order to arrest PM Raja Pervaiz Ashraf.
Analysts say that Raja Pervaiz Ashraf is unlikely to be arrested imminently.
The head of Pakistan’s anti-corruption agency has refused an order by the Supreme Court to arrest Raja Pervaiz Ashraf for allegedly taking bribes.
Fasih Bokhari of the National Accountability Bureau said investigations had not produced enough evidence to justify an arrest.
Raja Pervaiz Ashraf denies accepting bribes when he approved power generation projects as minister for water and power in 2010.
Mohammad Tahir-ul-Qadri signalled on Thursday that his four-day protest would end later in the day.
Talks began in the afternoon when a delegation of cabinet ministers and government members entered the bullet-proof container where he has been holed up since Tuesday with thousands of his supporters gathered alongside.
Information Minister Qamar Zaman Kaira told the AFP news agency that the talks were intended to resolve the stand-off, which has paralyzed much of the centre of Islamabad.
His supporters, who have braved cold and heavy rain, reportedly broke into cheers and danced in the street at news of the dialogue.
Mohammad Tahir-ul-Qadri’s march from Lahore to the capital culminated in a mass rally on Monday evening.
Clashes briefly erupted on Tuesday but the mass protest has been largely peaceful.
The cleric has said he wants the military and judiciary to be involved in installing a caretaker government to oversee the forthcoming elections.
But he suffered a setback on Wednesday when the leader of the main opposition, the Pakistan Muslim League, refused to back his protests.
There has been speculation that Mohammad Tahir-ul-Qadri may be fishing for a role for the military and the judiciary when it comes to the appointment of a caretaker government to oversee over the forthcoming elections.
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