The initial reaction of Pakistani government had been one of disbelief and promise of cooperation, involvement of Pakistani (non-state? ) elements in the Mumbai terror attack had never been ruled out. But before the officials of both the countries could swing into action the mischief-makers did. Pakistani officials later revealed that right after the Mumbai terror attack someone pretending to be Indian Foreign Minister Pranab Mukherjee, had called up Zardari and threatened the Pakistani President with a war. That partly explains the knee-jerk reaction of Zardari and the Pakistan government but the real fallout was the Pakistani media and its civil society's response to their government's attitude. It is likely that their government's reaction to "India's threat" might have left them feeling humilated. That would explain why the Pak media went into an overdrive denying Indian perspective and spawning a string of conspiracy theories. Ironically, it is the Pak civil society represented by its media that had been expected to lead the charge against extremists and militants but what it did instead is play on nationalism and turn on the heat on its government to take tough stand against India.
As per the latest news coming in Pakistan may now be reconciling with the idea that the perpatrators might indeed be from its own territory and agencies but the leadership is unlikely to soften down a bit and co-operate with India. The demand for "credible evidence" by Pakistan and the Indian authorities' hesitation to share them is likely to keep the rumor-mill in Pakistan busy, India fuming and the perpetrators going farther away from the law.
From the Indian perspective it is a very tricky situation since there is no third-party authority to establish the credibility of evidence. Pakistan has already disowned Ajmal Kasab, the sole surviving terrorist even if a Pakistani news channel had already proved it through a sting operation. Indeed, if the Pakistani authorities so desire they can remove every piece of evidence and claim that Pervez Musharraf did not belong to Pakistan either! This may sound like a joke, which it is, but technically it is quite possible. In such a scenario it is very natural for India to hesitate sharing evidence with Pakistan which can be discredited by the latter. Let us not forget that whoever planned the whole thing had also planned to make it look like handiwork of a local Indian group from Hyderabad. It is quite likely that a lot of "evidence" might have been liberally "dropped" to mislead investigators. Perhaps the only thing that did not go according to the plan was the capture of one of the attackers. This convinces Indian authorities that the plot was hatched in Pakistan but at the same time this piece of evidence might not be deemed enough to convince Pakistan to act unless it itself wants to.
Nawaz Sharif may have now retracted from his statement but at that point of time he was being quite logical and reasonable by asking the Pakistani establishment and society to introspect. Instead of asking India for evidence to prove its national's role in the Mumbai terror attack what Pakistan shpuld do is ask itself if it is really difficult to believe that the militants who are attacking Pakistani cities (Marriott attack) on a regular basis would refrain from attacking Indian cities as well when given a chance? In fact, they also need to ask themselves if groups like L-e-T and J-e-M and their activists exist in Pakistan and if they do, what is their ideology, objectives and the means to achieve that objective. Once Pakistan has reconciled itself with these facts it would not need to look at India for evidence, Pakistan already has plethora of information that could be treated as evidence once the administration is ready to accept facts. Interestingly, a similar situation had been unfolding in India some years back when Indian Muslims were in the denial mode, it may have come as a shock but things changed after the acceptance. Currently, thousands of Indian Muslim clergies have through fatwas, sermons and the media condemned Islamic radicals for terrorism,calling it anti-Islamic. In fact, for the past few years there were indications of Hindu fundamentalists resorting to terror tactics but the fact was brought to light by the administration itself however belatedly. By living in denial, Pakistan is not only being unfair to India, it is also putting its future in great peril.