Talks between Philippines, Muslim rebels collapse

Kuala Lumpur: The Philippine government and the largest Muslim rebel group failed to reach a pact on Friday to create an ancestral home for 3 million Muslims in the country's south, the rebel group said.

Such an agreement is seen as vital for the resumption of formal peace talks, although it would not guarantee the end of a near 40-year-old conflict that has killed 120,000 people and displaced 2 million on the resource-rich southern island of Mindanao.

"We failed to settle the old issues after two days of hard bargaining," Mohaqher Iqbal, chief negotiator of the Moro Islamic Liberation Front (MILF), said after talks in Kuala Lumpur brokered by the Malaysian government.

"The talks collapsed because the government was undoing already settled issues. The signing ceremony set for August 5 was cancelled," he told reporters.