MANILA - Malaysia would be unable to host peace talks between the Philippines and Muslim separatists while Manila treats the rebel negotiators as terrorist fugitives, Kuala Lumpur's envoy here said today.

Malaysia earlier offered to host the negotiations, but Kuala Lumpur has since urged Manila to lift arrest warrants and bounties against senior Moro Islamic Liberation Front (MILF) officials so talks to end the decades-old rebellion in the southern Philippines could start.

"It (the issue of arrest warrants and bounties) has to be resolved," Malaysian ambassador to Manila Taufik Mohamed Noor told reporters here. "It is a prerequisite."

A lower court in Davao has a standing order for the arrest of MILF chief Salamat Hashim ( photo )and dozens of other MILF men, including top rebel negotiator Murad Ebrahim, for their alleged role in the bombing of the southern city's airport and wharf earlier this year that claimed at least 38 lives.

Political asylum

MILF spokesman Mohagher Iqbal said his group dared not risk the detention of its leaders, and demanded that Manila drop the criminal charges against them.

Official sources said Malaysia has expressed concern that should the talks fail, the rebel negotiators would have no recourse but to seek political asylum in Kuala Lumpur.

Retired general Renato de Villa, a senior adviser to President Gloria Arroyo, said Friday that her government was prepared "to undertake legal steps in order for the negotiations to be facilitated."

As far as the rewards offered by Manila for the arrest of Hashim and key lieutenants, "the executive is prepared to act on the problem," de Villa told reporters.

But he ruled out the grant of safe conduct passes to Hashim and the others, saying it would be "incompatible with the existing warrants of arrest" against them.

He urged the MILF to take the initiative and seek relief in the judiciary, saying the executive could not interfere in the affairs of another branch of government.

The 12,500-member MILF has been waging a decades-old guerrilla campaign to set up an Islamic state in the southern third of the mainly Roman Catholic Philippine islands. - AFP