The police report said Iqbal had "committed a crime". The Sunday's is the fourth road accident in recent years in which U.S. diplomats have hit and killed people in Islamabad, the capital city and they got away with it because they had diplomatic immunity.
Ausburn was immediately detained by the police and was moved to the Secretariat Police Station and was released only after getting written communication from foreign ministry confirming his diplomatic position.
A motorcyclist was injured after being hit by a US Embassy vehicle on Islamabad's Constitution Avenue on Sunday night.
Nazakat has been charged with Section 279 (rash driving or riding on a public way) of the Pakistan Penal Code.
Police also filed a case against the chief security officer of the U.S. embassy in Islamabad, Taimoor Pirzada, for attacking and misbehaving with personnel following the accident.
A spokesman for the American Embassy in Islamabad was not available for comment.
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The police official, who were on duty nearby, took him and his auto into custody and shifted them to the Secretarial police station for legal action. Ausburn produced his diplomatic card issued by the foreign office along with a valid driving licence to police.
The diplomat was later handed over to the Foreign Office after his documents were verified.
A United States diplomat has been released after being taken into police custody.
This comes weeks after American military attaché Colonel Joseph E Hall killed a motorcyclist in a collision.
In July 2010, a USA embassy officer attached to the embassy's Force Protection Department, had hit and killed a young man driving a motorcycle on the 7 Avenue. In the wake of that incident, Pakistan's authorities have sought to bar Hall from leaving the country. A man was killed and another was injured in the accident.
The two accidents come amid Islamabad's increased diplomatic tension with Washington over allegations Pakistan harbors terrorist sanctuaries.