Talks between Philippines, Muslim rebels collapse

By Jalil Hamid and Manny Mogato

KUALA LUMPUR/MANILA (Reuters) - The Philippine government and the largest Muslim rebel group failed to reach a pact on Friday to create an ancestral home for 3 million Muslims in the country's south, both sides said.

Such an agreement is seen as vital for a resumption of formal peace talks, but would not guarantee the end of a near 40-year-old conflict that has killed 120,000 people and displaced 2 million on the resource-rich island of Mindanao.

"We failed to settle the old issues after two days of hard bargaining," Mohaqher Iqbal, chief negotiator of the Moro Islamic Liberation Front (MILF), said after talks in Kuala Lumpur brokered by the Malaysian government.

"The talks collapsed because the government was undoing already-settled issues. The signing ceremony set for August 5 was cancelled," he told Reuters. "They're trying to re-open discussions on what had been agreed upon."

Friday's breakdown came a week after both sides reported a breakthrough on the issue following several days of talks. Malaysian and Philippine foreign ministers had been due to witness the signing of the pact on August 5.

A Malaysian government source said the two sides became deadlocked over the issue of territorial rights.

"To everyone's surprise, the Philippine government re-visited the territorial issues which took us 14 months to resolve," the source said. "The territorial issue ... has created an impasse and led to the collapse."

No further talks have been scheduled and both sides will return home on Saturday.  Continued...