We analyze theoretically the experiment reported in [F. Gerbier et al., Phys. Rev. Lett. 95, 050404 (2005)]. There, the interference pattern produced by an expanding atomic cloud in the Mott insulator regime was observed, indicative of short-range coherence in the system. The latter was traced back to the presence of a small amount of particle-hole pairs in the insulating phase for finite lattice depths. We analyze the influence of these pairs on the interference pattern using a random phase approximation, and derive the corresponding visibility. We also account for the inhomogeneity inherent to atom traps in a local density approximation. The calculations reproduce the experimental observations, except for very large lattice depths. The deviation from the measurement in this range is attributed to the increasing importance of nonadiabatic effects.