Philippine government and Muslim separatist negotiators met yesterday in Malaysia for a new round of talks centering on the controversial issue of ancestral domain, a top official said.

Malaysia has been mediating peace talks between Manila and the 12,000-strong Moro Islamic Liberation Front (MILF) Muslim rebel group that has been fighting for more than 40 years to set up an Islamic state in the southern third of the Philippines.

"Our panel of 22 officials are here for the meeting. I think we are on the right track," Philippine presidential adviser Jesus Dureza told AFP after the two-day talks began in a secret location with a round of technical meetings yesterday.

Dureza said the two parties were meeting on the contentious issue of ancestral domain.

"It is an important part of the discussions. We hope to see some progress," he said.

The previous round of talks ended last September with some progress on the issue in the southern resort of Port Dickson.

Manila and the MILF signed a ceasefire in 2001 and opened peace talks but one of the stumbling blocks was the rebels' demand for recognition of their "ancestral domain," or areas once inhabited by Muslims in the southern region of Mindanao.

Officials previously said recognizing Muslims' "ancestral domain" might infringe on existing property rights and areas under the jurisdiction of local governments.

Mechanism working well

Muslims, who once inhabited most of the southern Philippines, have complained that they had been eased out of many of their territories by centuries of Christian migration.

Dureza said Manila would not fix a date for the signing of a peace deal with the MILF.

"We cannot put a date. It is work in progress," he said.

On the participation of ceasefire teams from Malaysia, Brunei and Libya in the troubled south, he said: "the mechanism is working well. There has been some incidents, but it is contained."

Malaysia and several other Organization of the Islamic Conference states are providing a small group of ceasefire monitors in the southern Philippines.