The Philippine government and Muslim separatist rebel negotiators said Thursday they have yet to reach agreement on territorial issues in an ancestral lands deal.

Three days of talks in Malaysia had yielded "significant progress" with "substantive gains" in settling details, the Philippine government and the Moro Islamic Liberation Front (MILF) said in a joint statement.

But they said "more work had to be done on the strand of territory, particularly in the determination and delimitation of areas" to be placed under the Muslims' territory.

Negotiators were "held back from reaching full consensus by the highly technical nature of the delimitation and demarcation of territory," it said.

"For this purpose, they agreed to conduct further ground validation and collection of additional data to guide them in the resolution of remaining items."

Both parties hailed the talks as frank and cordial and said they had agreed to extend by a year an agreement to cooperate to fight criminals and terrorists in the southern Philippines when the current deal expires on June 21.

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.

The land consists of untitled communal farms that came under formal state ownership when the Philippines became a Spanish colony in the late 16th century.

Both sides announced in February they had reached a preliminary deal on the Muslims' ancestral domain but were to work out details in Kuala Lumpur.

Extend mandate

Malaysia has been mediating in peace talks between Manila and the 12,000-strong MILF, which has been fighting for over two decades to set up an Islamic state in the southern third of the Philippines.

The joint statement said negotiators had decided to request that Malaysia, along with Brunei and Libya, extend the mandate of international monitoring teams (IMT) watching the ceasefire.

"Both sides likewise agreed to expand the composition of the IMT to include the participation of other nations in monitoring the rehabilitation and development work related to the peace process," it said.

Manila has said it expects to sign a peace agreement this year with the MILF, which was left out of a political settlement reached with the rival Moro National Liberation Front (MNLF) in 1996.

Leaders of both factions launched a separatist war in Mindanao island in 1971. The rebellion split into two in 1978 when the MILF was set up.