Philippines President Gloria Macapagal-Arroyo has ordered a thorough investigation into the reported involvement of at least four army officers in the botched rescue operations of Abu Sayyaf hostages in Lamitan town, southern Basilan last June.

A statement from the presidential palace said the President has directed Defence Secretary Angelo Reyes to conduct high-level investigations into the reported collusion between army officers and the Abu Sayyaf, following allegations by Cirilo Nacorda, a parish priest in the town, who was himself held hostage by the terrorist group earlier.

"I discussed this with Secretary Reyes and he will be giving instructions to conduct the inquiry on behalf of the Executive Branch," the President said.

The top-level investigations follow separate probes by the military and the House of Representatives. Also yesterday, an official of the independent Commission on Human Rights revealed that they have received reports of the Abu Sayyaf-Army collusion.

The organisation's commissioner, Nasser Maharomsalik, said they have interviewed several witnesses who saw ranking army officers taking a bag full of money believed to be from the Abu Sayyaf during the failed siege of the Jose Torres Hospital in Lamitan on June 3, where the military was able to corner some 200 Abu Sayyaf fighters who were holding 20 hostages taken from an island in western Palawan.

"The witnesses are willing to come out in the open to testify if the government can guarantee their personal and their families safety," said Maharomsalik.

According to Nacorda, the collusion between the army in Basilan and the Abu Sayyaf was the reason why the rebels were able to elude government forces even after three months of offensive operations.

He added that "there may be more than meets the eye in the Lamitan siege".

The defence secretary said the military was conducting a fact-finding probe but also described Nacorda's statements as "wild, preposterous accusations." "I know these officers and they will not do such things and I assure you these accusations are without basis," Reyes said.

The Abu Sayyaf is still holding 18 Filipinos and two American hostages in Basilan's jungle.

Last week, the Abu Sayyaf beheaded at least 10 villagers whom they abducted along with dozen of others from a remote Christian community in Lamitan. A third American hostage, Guillermo Sobero is also believed to have been beheaded in June.

Nacorda claimed that even the U.S. Federal Bureau of Investigation (FBI) was pursuing the possibility of collusion between the Abu Sayyaf and the army.

The priest said he had decided to reveal what he knows because he could "no longer stomach the activities of the military in Basilan".

Hector Janjalani, younger brother of the late Abu Sayyaf founder, Abdurajak Abubakar Janjalani, confirmed the supposed connivance of certain military, police and government officials.

Hector was captured by police in Manila early this year. He said that based on what he had learned from his brother, government officials were helping arm Abu Sayyaf members, or masterminding abductions themselves.

Our Zamboanga Correspondent adds: Clashes between security and Abu Sayyaf forces erupted yesterday on the outskirts of Basilan's capital Isabela City. First Infantry Division spokesman, Maj. Alberto Gepilano said the skirmishes broke out in Balawating village when soldiers were tracking down a band of Abu Sayyaf gunmen.

It is not known if there were casualties, Gepilano said, but fresh military reports from commanders in the area indicate that many gunmen were either killed or wounded. "We are awaiting progress reports from the field," Gepilano added.