In a major breeakthrough, a day before the 72-hour deadline of the beheading of three American hostages ends, a government negotiator has received assurances from the rebel Abu Sayyaf of their continued safety.

William Castillo said the rebel spokesman, Abu Sabaya, assured him the lives of the other 10 hostages would also be spared. In an interview with Radio Mindanao Network, Castillo said tersely: "We have reached an agreement."

He did not give details regarding the offers made by the government or the other demands made by Sabaya. "We negotiated smoothly. We had a real good talk. We did this many times last Friday," added Castillo.

At the same time, Castillo admitted having held talks with former Malaysian senator, Sairin Karno, and Malaysian businessman, Yusuf Hamdan, who were chosen by Sabaya as the group's favoured negotiators.

"We are studying that proposal (of the Abu Sayyaf to have new foreign negotiators)," noted Castillo. There is a hint that the government has given in to the group's demand in exchange for the lives of the American hostages.

"I asked (Sairin) about the proposal here and ... he said he cannot get involved in these talks without the permission of the Malaysian government," Castillo quoted the Malaysian senator as saying.

Castillo said he wanted Sabaya to understand that the Malaysian government has refused to be involved in the solution to the hostage crisis because of its policy of non-interference. The government has been avoiding the use of foreign and local negotiators because of their alleged participation in the ransom pay off for the release of several hostages in the past.

Sairin and Yusuf allegedly assisted local government officials in paying ransom money for the release of nine Malaysian hostages last year. These hostages were some of the 20 victims who were taken by the group from Malaysia's Sipadan island in April, 2000. The other hostages were reportedly freed with the payment of ransom money by non-government representatives from Libya and Europe.

At the same time, Castillo has warned the Abu Sayyaf that troops would not be withdrawn from Basilan's Lamitan and other nearby towns as long as the hostages are held by their abductors.

Sources said the transcript of the dialogue was transcribed by the U.S. Embassy, adding that copies of the transcript were given to people involved in planning a strategy to handle the hostage crisis which began in Palawan, south-western Philippines, on May 27.

Castillo's breakthrough with Sabaya, sources said, would be used as a delaying tactic, to give the government and other military and police negotiators time to make their respective moves in handling the hostage crisis.

The Castillo-Sabaya dialogues were meant to hold the Abu Sayyaf Group in one place and prepare the entry of three U.S. Federal Bureau of Investigation (FBI) experts in hostage-negotiation in an area near the hostage-takers, sources said.

The FBI agents, identified as Assistant Legal Attache, Dennis Pierce, supervising agent, Frankie Ishizaki, and agent Garold Hewitt, met for an hour with Filipino agents at the headquarters of the Criminal Investigation and Detection Group (CIDG) at Camp Crame in suburban Quezon City last Friday.

"They will provide us with technical assistance only. Whatever evidence we have gathered, we will share with them, and ask for their opinions when needed," said Chief Supt. Nestorio Gualberto, CIDG director, when he emerged from the meeting.

The hostage-experts arrived in Zamboanga where they reportedly asked for aerial photographs of the forested area where the hostages are being held.