Manila to resume talks with Muslim rebels next week

MANILA, Aug 14 (Reuters) The Philippine government will resume talks with the country's largest Islamic separatist group next week, despite intense fighting with Muslim groups over the past month and vowing an offensive against ''terrorist cells''.

Talks with the Moro Islamic Liberation Front (MILF), which will focus on an autonomy package for the guerrillas, will be held in Malaysia from August 22, presidential spokesman Ignacio Bunye told reporters after a top-level security meeting.

The announcement comes after a flare-up of violence over the past month between troops and members of various separatist groups, including the MILF, on the southern islands of Basilan and Jolo. Nearly 80 people have been killed, more than half of them soldiers.

The government has maintained the fighting has been with Abu Sayyaf, a group linked to al Qaeda and the regional Jemaah Islamiah, but says they may have been supported by rogue members of other groups.

President Gloria Macapagal Arroyo has said a full offensive is under way against ''terror cells'', but no fighting has been reported yet from the ground. She has also said peace talks with the MILF will continue.

''There is broad support for the president's affirmation of the prime importance of preserving the ceasefire and advancing the peace process,'' Bunye said.

Talks between the government and the MILF have been stalled since September last year over the size and wealth of a proposed ancestral homeland for 3 million Muslims in the south of the mainly Roman Catholic country.

In December, there was a breakthrough when government peace negotiators offered a ''new formula'', recognising the Muslims' right of self-determination, giving them authority short of independence to govern a Muslim-dominated territory.

But, the peace panels of the two sides have yet to meet to discuss details of the new formula.

The MILF welcomed Bunye's announcement, saying they have been ready for negotiations since as early as May.

EXPENSIVE OPTION ''It's about time we concentrate on finding the real solutions to the decades-long problem in Mindanao,'' Mohaqher Iqbal, the rebels' chief peace negotiator, told Reuters from his hideout on the southern island of Mindanao.

''We have tried everything in the past. War was really a very expensive option for the government, but we wanted government to really show sincerity and honesty in taking the peaceful path to peace in Mindanao.'' Last month, fighting broke out between troops and gunmen believed to be from the MILF on Basilan island, and at least 14 soldiers were killed. The MILF says its members were involved but denied that it was involved in beheading 10 of the victims.

Last week, fighting on nearby Jolo killed at least 60 people, including 27 soldiers. Members of the Moro National Liberation Front (MNLF), an older separatist group that signed a peace deal with the government in 1996, said they were involved.

Although Arroyo said the offensive was under way on Sunday, there has been no major fighting on Jollo or Basilan.

Major-General Ruben Rafael, army commander on Jolo, said the rebels had broken into smaller groups to avoid a frontal clash with troops, backed by about 100 US troops providing tactical intelligence.

The US troops have been there for about five years, but are barred from combat under Philippine law.

Lee McClenny, a US embassy spokesman, said they were doing various activities in cooperation with the Philippine military, including but not limited to joint civic action, advice, assistance and information sharing.

''These joint activities are ongoing on Jolo, and will continue as long as requested by the Philippines,'' McClenny said.

Defence Secretary Gilbert Teodoro, who took office last week, said the US forces were helping track down the Abu Sayyaf.

The Philippines has around 10,000 troops on Jolo and Basilan.

REUTERS SBC KP1457