Fresh violence has erupted in the Philippines, with Muslim rebels reportedly firing at government troops in a effort to regain a lost stronghold.
Gloria Arroyo is pursuing a policy of 'active defence' against the MILF
President Gloria Arroyo confirmed that fighting had taken place near the town of Pikit, and asked the rebels from the Moro Islamic Liberation Front (MILF) to renounce what she described as "terrorism".
Meanwhile the Philippine police said they had foiled a plot by suspected Islamic militants to plant bombs in the capital Manila.
The announcement follows the arrest of Mariano Lomarda, a man with suspected links to the Islamic militant group the Raja Solaiman Movement.
The fighting near Pikit took place in the complex of Buliok, a former MILF stronghold on the southern island of Mindanao, which government forces captured late last month.
The MILF rebels were forced from the area last month, when the government launched a massive military offensive after accusing the rebels of harbouring terrorists.
Army chief Lieutenant-General Narciso Abaya said the rebels blasted the area with mortar and rocket
fire, but were repulsed by helicopter gunships and attack
MILF spokesman Eid Kabalu confirmed the battle and claimed the rebels recovered a two-storey building within Buliok previously used as a base by MILF chief Salamat Hashim.
President Arroyo stressed the military would maintain its policy of
"active defence", which involves aggressively pursuing the MILF.
The 12,500-strong rebel group has waged a 25-year-old campaign for an Islamic state in the southern Philippines.
Despite signing a peace agreement with the government, sporadic violence continues to erupt between the two sides.
The MILF's leaders "must issue an equivocal statement proscribing
terrorism as a means to attain (their) objectives," Ms Arroyo said on Wednesday.
Mariano Lomarda was arrested on Monday by the Philippine police force.
Grenades and a mobile phone said to contain the numbers of other alleged Muslim extremists suspected of planning a "diabolical plot to sow terror" in Manila were found during his arrest, police said.
The Raja Solaiman Movement, to which Mr Lomarda is suspected to belong, is alleged to be involved in militancy in the northern Philippines - a predominantly Roman Catholic region which the group aims to convert to Islam.
The group is said to have been planning bombings in the centre of Manila in sympathy with the current situation in Iraq.
Investigators are trying to determine whether the group has any links with Muslim separatists in the southern Philippines.
"We have intelligence reports that they are out to
implement terrorist plans to sympathise with the losses of
the MILF and the Abu Sayyaf," said Manila police chief
The Abu Sayyaf is a small
but violent Muslim extremist group notorious for
kidnappings and beheadings.
The Raja Solaiman Movement's base in the northern Tarlac province was raided last year, and police seized guns and explosives which they said were being stored for use in bomb attacks.
Mr Lomarda escaped on that occasion, and had been the subject of a manhunt ever since.