A pathbreaking theoretical investigation of the dynamics of gas embedded plasma discharge has been performed within the scope of a one-dimensional, two-temperature magnetohydrodynamic model that includes plasma dynamics, as well as the accretion of the plasma part of the discharge from the adjoining gas. Good agreement between the simulation results and experimental data has been found. New information about the discharge structure and the distributions of plasma parameters has been obtained. It was revealed that the structure of initially preionized region greatly affects pinch dynamics even at the late stages of the discharge evolution. Present investigation opens new horizons in solving various sophisticated problems of modern plasma physics that require consideration of plasma dynamics at the conditions, critical for current breakdown.