Jolo ransom mystery deepens

Arrested rebel suspect Jeffrey Jinnul steps out of his cell

There are fears that rebels in the Philippines could call off plans to free a number of hostages after police arrested two men carrying $240,000 believed to be part of a ransom payment.

Three Malaysian hostages were freed last week

The pair were detained as they tried to convert the cash into local currency at a bank in the southern town of Zamboanga.

Police believe the men - said to be a security guard and a soldier absent without leave - were working for the Abu Sayyaf group responsible for kidnapping 21 people from a Malaysian island in April.

The military says the rebels have been paid more than $5.5m for a number of releases so far despite the Philippine Government's official no-ransom policy.

Releases

Government negotiator Farouk Hussain told the French AFP news agency that the arrests could complicate negotiations for the release of the remaining hostages.

Reports said Abu Sayyaf leader Ghalib Andang had earlier agreed to free his captives in batches, although no dates have been given.

But an official close to the negotiations was quoted as saying Mr Andang had now told a go-between there would be no releases unless the two arrested men were freed.

However chief government negotiator Robert Aventajado said the arrests would not affect arrangements.

Kidnappings

The Abu Sayyaf is one of two groups fighting for an independent Islamic state in the predominantly Catholic Philippines.

The hostages were kidnapped on 23 April from the Malaysian diving resort of Sidapan and taken to Jolo by boat.

Since then the rebels have carried out a series of further kidnappings on Jolo.

So far they have released 11 captives from the Sidapan group and a number of other hostages.

Philippine President Joseph Estrada insisted on Friday the government had not paid ransoms.

He suggested the intercepted money could have come from private or foreign sources.

The remaining hostages include five French, two Germans, two Finns, two South Africans a Franco-Lebanese woman and around 17 Filipinos.