Abu Sayyaf leader, Abu Sabaya, responsible for abducting dozens of hostages threatened yesterday to carry out more killings that could spread his violent separatist movement across Southeast Asia.

Abu Sabaya demanded that the Philippine government bring in three negotiators. Sabaya, who has already killed several captives and has claimed to have beheaded one of the three Americans he holds, said he would kill more if the government refused.

Speaking by satellite telephone from Basilan Island, he specifically mentioned Martin Burnham, whose wife Gracia is also a hostage. "If we chop off the heads of people like Mr. Burnham, the Americans would intervene, and so would the Arabs and Bin Laden's groups. What will happen then to the Philippines?" Sabaya said. "This problem would never end. Actually, many more of these (attacks) could happen."

Of the hostages, Sabaya said: "They're OK. We have divided them into different groups." He said he will only issue a list of demands once former Malaysian senator Sairin Karno, Malaysian merchant Yusof Hamdan and Filipino official Farrouk Hussein are brought in to mediate.

But the Malaysians said yesterday they did not want to get more involved. "We refuse," Yusof said. "We've been trying to help in a nice way, but some people misinterpret what we've been trying to do. Some say we're favouring only the release of Muslim hostages. We want everybody released, and we're not doing this for money."

Sabaya shrugged off criticism. "If fighting for our rights is being a terrorist, yes, we're terrorists," he said. "We're not afraid of being condemned by the whole world as long as we're not condemned by Islam."

He also denied seeking ransom again. "I'm saying our demand is not money. If it was only for money, we made money from Sipadan," Sabaya said yesterday, referring to the abduction of 21 people, including 10 foreigners, from a Malaysian dive resort in April 2000.

"Our principles are more expensive. The main reason here is freedom." Sabaya said he could not put any of the hostages on the phone because he climbed a mountain to get better reception for the call.

President Gloria Macapagal Arroyo has offered $2 million in rewards for the capture of Abu Sayyaf leaders and has said they can only surrender or die. "That has no effect, her threats of us being pulverised," Sabaya said, adding that if he or other Abu Sayyaf leaders are killed, "the group lives on."

Meanwhile, Philippines soldiers are believed to have cornered the main group of Abu Sayyaf fighters on Sunday.

In a press briefing, President Arroyo's spokesman Rigoberto Tiglao revealed an encounter last Sunday between the military and the Abu Sayyaf in the rebel stronghold in Sampinit Complex in Central Basilan.

Tiglao said Abu Sayyaf fighters were able to escape but said that more importantly, "the military is correct in its target." In a separate interview, Armed Forces spokesman Brig. Gen. Edilberto Adan said one soldier and at least four Abu Sayyaf guerrillas were wounded in that brief encounter. The latest encounter brought to 57 the number of soldiers wounded since fighting began on June 1 in Tuburan. Sixteen others have died since the start of operations in Basilan.

Adan said the military clashed with a group of 50 to 60 rebels who were most likely serving as defence guards of the main bulk under the command of Abu Sayyaf leader Abu Sabaya who have the hostages in custody.