Hostage rebels demand Islamic state

Security forces stand guard outside a Manila cinema

The Abu Sayyaf guerrilla group has reportedly demanded an independent Muslim state as a condition for the release of the 21 hostages it is holding.

Presidential aide Ronaldo Zamora told a news conference on Monday that the demands, now being considered by a cabinet committee, had not included any ransom.

He said the rebels had also demanded a commission to look into allegations of mistreatment of Filipino Muslim immigrants in the Malaysian state of Sabah.

The gunmen are demanding an Islamic state

The authorities were hoping to continue negotiations on Monday, but the rebels failed to turn up for a meeting.

Chief negotiator Robert Aventajado said he spent four hours at the designated meeting spot in Jolo island, where the hostages are being held.

The rebels apparently wanted to meet all the negotiators, but they were not all present.

"We have to replan it for another day ... within the week," said Mr Aventajado.

MILF peace talks

News of the Abu Sayyaf demands came as the country's main Muslim rebel group announced that it had agreed to resume peace talks.

Eid Kabalu, spokesman for the Moro Islamic Liberation Front (MILF), said peace negotiators would begin talks again on 30 May in Cotabato city, in the south.

"The MILF has decided to sit down anew with the government... without preconditions," he said on a local radio station.

About 200 rebel fighters had left their positions along a road in Maguindanao province as "a gesture of goodwill", he added.

Talks broke up on 30 April during intense fighting between the military and the MILF over control of part of a road linking Cotabato city to other provinces.

The military said the rebels had been extorting money from commuters.

The MILF offensive that followed was said to have forced 100,000 people to leave their homes.

The fighting has displaced nearly a quarter of a million civilians.

Security alert

In Manila, security has been tightened after a bomb blast on Sunday, which killed one person and injured 17.

A Muslim girl in Jolo, where security has been tightened

On Wednesday, a blast in Manila's financial district injured 13 people.

Blasts in Jolo on Thursday killed at least five people and injured more than 70.

Bombs also went off in the largest southern island, Mindanao, home to most of the country's five million Muslims, but no casualties were reported.

Defence officials have blamed the blasts on either the Abu Sayyaf or MILF.

Police dogs trained to sniff bombs were placed at the site of Sunday's bomb blast - SM Megamall.

Foreign missions were put on alert and the US embassy issued a warning to its citizens.

Fears that the violence that has continued for decades in the south of the country has arrived in the capital sent share prices diving on Monday.

The currency, the peso, hit a 19-month low.

President Joseph Estrada was said to be "extremely distressed" by the bomb blasts and has called on the public to take precautions.