U.S. diplomats said that they would not pay ransom and were confident that the Abu Sayyaf group would not make good its promise to behead their three American hostages in the southern Philippines.

"We continue to call for the safe release of the hostages. The U.S. would view any harm to the hostages as a cowardly act and our position remains that we do not pay ransom," noted Judith Cefkin, the U.S. Embassy's Counsellor for Political Affairs.

At the same time, the U.S. diplomat asked that "channels of communication" between the Abu Sayyaf leaders and the Philippine government remain open.

The U.S. presence in the country, since the start of the June 1 joint war games of the U.S. and the Philippine Armed Forces, has been seen as a subtle threat to the rebel group which has brought more than 50 hostages – including the three Americans – to Basilan, near Zamboanga port city in southern Philippines.

The U.S. Federal Bureau of Investigation (FBI) has also sent officials to "advice and train" Philippine officials in trying to resolve the hostage crisis.

Meanwhile, Philippine political and military leaders, as well as U.S. diplomats, were prepared for the so-called "bluff" or "another war game" being undertaken by Abu Sayyaf leader, Abu Sabaya. The group had given President Gloria Arroyo until tomorrow, or 72 hours from Thursday afternoon, to get a Malaysian negotiator to talk with the Abu Sayyaf leaders. If this was not done, the group warned, the American hostages would be beheaded.

Sabaya said a rejection of the Malaysian negotiator would prompt the Abu Sayyaf leaders to behead Kansas-born Christian missionaries, Martin Burnham, 41, and Gracia Burnham, 42; as well as California-based Guillermo Sobrero. Burnham sustained wounds in the back due to a grenade explosion at the height of the clash between government soldiers and the rebels, Sabaya claimed earlier.

The three American nationals were among the nine remaining hostages out of 20 who were kidnapped from Dos Palmas Hotel in Palawan on May 27. Nine were released and two others killed.

The group reportedly had a total of 63 hostages after rounding up people at a church and a hospital complex in Lamitan, Basilan province, last weekend. All the hostages were brought to nearby Tuburan in Basilan, after passing through a thick military dragnet posted around the town. Another Abu Sayyaf group which is based in nearby Jolo is poised to give assistance to its comrades in Basilan.

Sabaya's chosen negotiator was former Malaysian senator, Sairin Karno, and he added that he was not satisfied with the government-appointed negotiator, William Castillo.

But Arroyo insisted she would not appoint another negotiator and that Castillo had been given "the full authority of the military, the Philippine National Police and this government".