The country's biggest separatist group the Moro Islamic Liberation Front (MILF) warned yesterday that its forces are ready to react if American and local troops taking part in joint wargames encroach on its areas in southern Basilan island.

"We will respond to any threats. We will shoot them if they encroach into our territories," Shariff Julabbi, MILF regional chairman said.

Julabbi's statement opened the risk of resurrecting hostilities between the government and the MILF with the U.S. troops, who are allowed to defend themselves based on the terms of the wargames, as potential third party in the fray.

The MILF is currently observing a ceasefire with the government in Manila and is known to maintain several camps in Basilan island where another separatist group, the Abu Sayyaf also actively operates.

The Abu Sayyaf is holding a U.S. Christian missionary couple Martin and Gracia Burnham, including a Filipino nurse Deborah Yap, in Basilan.

He said the MILF is maintaining several camps in Sumisip, Tipo-Tipo and Tuburan towns in Basilan and that more than 4,000 MILF fighters are scattered across Basilan.

Julabbi said: "We are currently maintaining a high level of alertness in Basilan and elsewhere in the Zamboanga Peninsula because of the joint RP (Republic of the Philippines)-U.S. war-games, and the past weeks had already resulted to skirmishes between MILF and RP forces in Tuburan town that left at least two dozens of soldiers and two of our fighters dead."

He deplored the wargames, dubbed Freedom Eagle, as just a "smoke screen" for the U.S. troops to mount a rescue operation to free the hostages who have been in the Abu Sayyaf's custody for more than seven months.

"You do not hold wargames in strife-torn areas and the U.S. forces are there to rescue the hostages, but we are warning them not to encroach into our territories because we will surely respond drastically," Julabbi said.

Southern Command spokes-man Major Noel Detoyato said security forces were pursuing the Abu Sayyaf in Tuburan town.

"We are running after the Abu Sayyaf in Basilan and we will pursue them wherever they are," Detoyato said, as he denied Julabbi's claim that many soldiers were killed in clashes in Basilan. What we killed were Abu Sayyaf members and we will wipe them out sooner or later."

Despite accusations by critics on the true intentions of the ongoing military exercises between troops of the two countries, the presidential palace in Manila has reiterated that the nature of the joint drills are for training the local armed forces on the use of more modern weapons and anti-terrorism tactics.

The Philippines and the U.S. had been conducting joint military exercises since 1999. Although the annual event has been a target of criticisms for nationalist and militant groups, the furore experienced over the Freedom Eagle drills is considered more intense.

"There were no controversies then (during earlier military exercises) it is only now that it has become controversial because they are within the area of conflict where two Americans are being held hostage," Brig. Gen. Delfin Lorenzana, chief of the Army Special Operations Command said.

Lorenzana also said another wargames will take place in April in northern Philippines aside from the current "Balance Piston" wargames in the region.

Lorenzana said 600-800 U.S. Special Forces troops will take part in the second large scale military exercise scheduled to run from April to May this year.

Our Manila Correspondent adds: Thousands of protesters belonging to the leftist group New Patriotic Alliance (Bayan) and the May First Labour Movement (KMU) plan to hold a huge demonstration in front of the U.S. Embassy in Manila today to protest against American military presence in the country.

In a press statement, the group stressed that the U.S. presence could worsen the crisis of the economy. The group accused both the American and Philippine governments of using people's tax money to finance the "onerous" RP-U.S. military exercises.

"The government would rather drain public coffers to fund the military exercise, than spend a single centavo to improve basic social services like education, health and housing for the poor," said Elmer Labog, labour movement's secretary general.

The labour leader also stressed that the hidden intention behind the U.S. government's arrogant stance against terrorism is its real intent to resolve the lingering economic recession, massive joblessness and people's unrest at home.

"U.S. employs brazen military power to expand territories for possible markets for its surplus products and cheap supply of oil and energy."