Mr Gilani said he has complete respect for the judiciary but maintained that President Zardari enjoys complete immunity. He asked for a month to provide more details; the court granted two weeks. Mr Gilani has been exempted from the next hearing on February 1. Today's proceedings highlight the twin threats to the government's survival from the army and the judiciary.
Here's your cheat-sheet to the big Pakistan story:
1) Why is the Supreme Court upset? Two years ago, the court struck down the National Reconciliation Ordinance which had granted amnesty to politicians including President Zardari in cases of corruption that date back to the 1990s. The Supreme Court wants the cases to be investigated. President Zaradari and his government argue that he enjoys immunity under the Pakistani Constitution. Mr Gilani's lawyer, Aitzaz Ahsan, did most of the talking for the prime minister during today's session and agreed to formally argue for the president's immunity before the judges when the hearing resumes on February 1.
2) On Monday, the court asked Mr Gilani to appear in person to explain his stand. That same evening, Mr Gilani won a trust vote in parliament. A resolution moved by his government that asked law-makers to establish "the supremacy of Parliament" over all other institutions including the judiciary was adopted. This lent a moral authority to Mr Gilani ahead of his court appearance.
3) But his government is also facing a furious army, thanks to memo-gate. The military has asked the Supreme Court for a "forensic examination" of who was behind a memo delivered in Washington last year after the US located and killed Osama bin Laden in Pakistan, leaving the army there embarrassed and upset. The memo, received by then Chairman of the US Joint Chiefs of Staff, Admiral Mike Mullen, asked for US help in preventing a coup. The memo was delivered by Pakistani-American Mansoor Ijaz, who says it was dictated to him on BlackBerry Messenger by Husain Haqqani, who was then Pakistan's ambassador to the US. Mr Haqqani has denied the charges but resigned, and now lives within the Prime Minister's residence. Mr Ijaz will testify in the Supreme Court on the 26th of this month. The Supreme Court will decide if the government sanctioned the memo, and if it can remain in office.
4) Two other Pakistani prime ministers have been served contempt notices by the Supreme Court. They were Zulfiqar Ali Bhutto and Nawaz Sharif.
5) Before the proceedings began at 9.30 am, security agencies closed off the high-security Red Zone that is home to the Supreme Court and other buildings like the parliament. Hundreds of policemen and parliamentary personnel were deployed in the area to create a three-tier security ring. Nearly 100 members of the Pakistani and foreign media were issued passes to cover the court proceedings.
6) Mr Gilani's motorcade drove the short distance from the premier's official residence to the Supreme Court at about 9.25 am with helicopters hovering above. Mr Gilani drove his white SUV into the court complex with his lawyer Aitzaz Ahsan sitting beside him in the front seat. The Land Cruiser bore registration no LRZ-786, a number representing "Bismillah al-Rahman al-Rahim". He waved to the large crowd that had gathered outside the court several times before walking into court. Today's hearing lasted 90 minutes. When it ended, a group of lawyers shouted slogans against Mr Gilani near the main entrance. The PM's security asked him to use another exit but he turned them down. Mr Gilani left court in his white SUV with Interior Minister Rehman Malik.
7) Opposition parties like Imran Khan's Tehreek-e-Insaaf say that the government is corrupt and must quit. Mr Khan whose popularity has surged in recent months said, "The age of martial law is over, because the Memogate scandal is such a shameful scandal, that if ever the army would have intervened, it would have been then. ...But, Pakistan has moved on and I think that the army realises now that people are not going to accept military takeovers anymore."
8) Former Pakistani President Parvez Musharraf may delay his plans to return home, said his spokesperson. Mr Musharraf has been warned that he will be arrested as soon as he lands in Pakistan. Mr Musharraf had announced that he would fly home between January 27 and 30. He has been living in Dubai and London since April 2009. In October, a court issued a warrant for his arrest over the killing of Baloch nationalist leader Akbar Bugti in a military operation in August 2006. Another court has declared him a fugitive and issued a separate warrant for his arrest for failing to cooperate with investigators probing the 2007 assassination of former premier Benazir Bhutto. He also faces a case for declaring an emergency in 2007.
9) Mr Musharraf was forced to resign as President in August 2008, days before Parliament was to take up impeachment proceedings against him on charges of attempting to impose authoritarian rule in Pakistan. He announced his resignation through a television address even as the coalition government said it had prepared a chargesheet for his impeachment.
10) Mr Zardari and his late wife, former Prime Minister Benazir Bhutto, were found guilty in absentia in a Swiss court in 2003 of laundering millions of dollars in kickbacks from Swiss companies when they were in government. They appealed, and Swiss authorities abandoned the case in 2008 at the request of the Pakistani government. The case was among thousands dropped as a result of an amnesty that allowed Bhutto to return from exile and run for election in 2008. She was assassinated in 2007 during the campaign.
(with inputs from The Associated Press)