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The military said it has successfully negotiated with the kidnappers who had agreed to lower their demand from P4 million ($100,000) to P200,000 ($4,000) in exchange for the release of three Indonesian crewmen who were abducted on June 17.

Police recovered a kidnapped Filipino trader yesterday, who escaped from his captors in the southern Philippines, officials said.

Dozens of Abu Sayyaf guerrillas are believed to have died as government forces stepped up their offensive against the extremists in southern Sulu, the military said yesterday.

Filipinos living in Indonesia are in danger of being abducted by militant groups in order to pressure the Philippine government to release jailed Indonesian national Agus Dwirkana, who was sentenced to 15 years imprisonment for possession of components of explosives.

Police commandos raided and seized a senior leader of the Moro Islamic Liberation Front (MILF) and his wife in the south on Friday, regional police commander Jose Dalumpines said in a report yesterday.

A suspect implicated in the kidnapping of a Spanish missionary on the southern island of Basilan was captured by soldiers late on Saturday, nine years after he committed the crime, officials said yesterday.

Fighting erupted between security forces and suspected rebels on Christmas day in the southern island of Basilan, leaving one soldier and two gunmen dead, officials said.

Unidentified gunmen attacked a U.S. pineapple plantation in the southern Philippines, blasting its main water pipeline, but the military said there were no casualties or serious damage to facilities.

It said masked gunmen threatened to execute the duo, Dodong and Liezl Dumaguit, late on Thursday after seizing them from their house in the town of Sibuco in Zamboanga del Norte province, where separatist rebels are known to operate.

Dozens of Abu Sayyaf guerrillas have fled to Tawi-Tawi, an island province close to the border with Malaysia in an effort to escape a massive military offensive on southern Sulu island, police and military intelligence reports said yesterday.

The separatist Moro Islamic Liberation Front (MILF) yesterday admitted that a man who was recently arrested by the military for transporting a bomb in southern Philippines, was one of their members, but said that the suspect was "framed" by authorities.

The Moro Islamic Liberation Front (MILF) yesterday denied links with the international militant organisations of Al Qaida and the Jemaah Islamiya.