The strike by 1.3 million workers hit schools, state hospitals and the judiciary. Strikers have demanded a pay rise of 8.6 percent, twice the inflation rate, and a 1,000 rand ($135) a month housing allowance.

President Jacob Zuma’s government has raised its offer to 7.5 percent and 800 rand for housing but workers rejected it and unions asked for more time to explain it to their members.

“Labour has decided to suspend the strike and this does not mean we have accepted the state offer,” 19 unions representing the state workers said in a joint statement.

The unions said they had 21 days to finalize discussions with their members on a draft agreement. The unions said they had already secured substantial concessions from the government.

The South African government had no immediate comment. Public Service and Administration Minister Richard Baloyi will issue a statement later on Monday, his spokesman said.

The ruling African National Congress welcomed the suspension.

“We believe this is a step in the right decision in ensuring stability and normality in our public sector offerings,” the ANC said in a statement.

But some striking workers were unhappy about the suspension.

“We want 8.6 percent and will stop at nothing. If our leaders think they can ignore our views, they are sellouts,” said Ken Khuzwayo, a teacher from Mpumulanga province.

Analysts said the labor action highlighted tensions between the powerful COSATU labor federation, which is in alliance with the ANC and the South African Communist Party.

“It is certainly positive but there is continuous strain among the alliance partners. The important thing here is that people are going back to work because the damage to the economy has been quite severe,” said Noelani King Conradie, economist at NKC Independent Economists.

Any agreement will force the government to find new funds just as it struggles to bring down a deficit totaling 6.7 percent of gross domestic product. The country’s budget in February set a 5.2 percent increase for state workers.

Government officials said there was no more room in the budget to increase the pay offer, which would swell state spending by about 1 percent.

Peter Attard-Montalto, emerging markets economist at Nomura International, said there was a risk unions could still reject the offer.

“I think 20 days was obviously quite long enough for such a strike but the risk still is that they reject the current offer in favor of 8 percent and 900 rand (housing allowance). There may well be another leg of the strike yet,” he said.

The biggest strike since 2007 has left bonds, stocks and the rand largely unaffected. But economists said the labor action, which saw police use rubber bullets and water cannon against workers, had cost the economy about a billion rand a day.

South Africa’s rigid labor laws, which unions support, make it less competitive than other emerging economies such as Brazil, Russia, China and India and less attractive to foreign investors.

Unions who helped Zuma come to power are disappointed he has not done more to improve workers’ conditions and this has contributed to a widening rift between the ANC and COSATU.

Analysts said Zuma’s political future would in part be determined by his handling of the dispute.

Unions are angry about alleged corruption and cronyism among members of Zuma’s government and have called for the reversal of a multi-billion rand empowerment deal in mining benefiting his son.

With the ruling party holding its mid-term policy conference later this month, alienating the unions could jeopardize Zuma’s position and risk losing support for the party in next year’s local government elections.