I have a feeling for the failure of talk between Rasheed and government. I think there is a lot under the iceberg. Here is my analysis (all speculation, but events seems to confirm that).
It seems that Rasheed, sympathisers of terrorists in the government (like Ejaz and Shujaat), as well as army and military intelligence knew that Lal building and Madrassas have plenty of wanted miscreants (foreigner and local) hiding there in the holes (underground bunkers). It seems that these bunkers are strongly fortified and have plenty of provisions that could last miscreants for months if not years.
It is also possible that these bunkers are connected from underground to some houses outside the complex and that is the reason government forces also put curfew all around the complex. Probably bunkers (with miscreants, arms, and provisions in them) are such that it would be unobvious to any layman visiting the complex.
[Question do arise that what these male miscreants were doing in Madrassa Hafza? As madrassa-e-Hafza is girl’s madreassa, the presence of so many guys there shows the real colour of these people]
Army wanted to get their hand on these miscreants and Rasheed (along with his sympathisers) wanted to save them. Rasheed realising that nothing is working with government, wanted to surrender but on condition that miscreants stay save. He wanted a package with government that he would give up everything if government forces do not enter the complex and complex goes to Auqaf where he believed that people would cover the miscreants and would be able to save them.
I think that Chaudhari Shujaat and Ijaz-ul-haq knew everything and wanted to save them miscreants too, those so-called Mufties also knew what is the real story, and hence in negotiation they agreed that whole complex would get transferred to Auqaf (especially Madrass Hafza that had most of tunnels should be transferred to Wafaaq-ul-Madaris immediately) and that these people would be given conditional freedom. They wanted to deceive President, government, and forces. Seem that President realised the implications of wording used in negotiation, and shrewdly asked to change the wordings in such a way that, even though nothing seems to have got changed the consequence of tactful wording to safeguard the miscreants in the negotiation was gone.
New wording was such that after the agreement, if government wants, they could have taken action against the miscreants, that was unacceptable to Rasheed as well as Mullah Brigades present there. From the conclusive wordings of the agreement and support of these politicians, mullah brigades, as well as media, President realised that as the siege would go on, Rasheed and his supporters would be able to pressurise the government further resulting in unwanted negotiation that could be dangerous for future of Pakistan (according to his army intelligence), as these people probably want ‘khooni inqalaab’ in Pakistan where minority with arms (misguided Ninja and goat brigades) would force majority (Muslims) to do what they want. Hence I believe to save Pakistan from future of bloodshed, the action started. Any take here?