Philippines president announces landmark peace plan with Muslim rebels

The Philippine government and the country's biggest Muslim rebel group on Sunday announced they had agreed a plan to end a decades-long separatist insurgency that has killed more than 120,000 people.

The historic agreement comes after 15 years of tortuous talks between the 12,000-strong Moro Islamic Liberation Front (MILF) and the government.

It calls for the creation of a new autonomous region in Mindanao, the Muslim-dominated south of the country, by 2016.

"This framework agreement paves the way for a final and enduring peace in Mindanao," said President Benigno Aquino.

Previous peace talks between the rebels and the government have broken down and led to a resumption of the violence that has claimed the lives of 120,000 people since the 1970s.

But there is optimism that this deal, which was negotiated in Kuala Lumpur, Malaysia, will succeed. With the MILF having dropped their demand for an independent state, Manila has agreed to establish a larger autonomous region in Mindanao than the current existing one and to grant it more political and economic power.

Crucially, the creation of the new region, which is to be called Bangsamoro, promises to give the four million Muslims in impoverished Mindanao a share in the region's untapped mineral riches.

Both Manila and the MILF leadership are keen to exploit the estimated £200 billion of oil and natural gas reserves in the area.

Manila would prefer to direct its military resources north where it is involved in a long-running territorial dispute with China over the Spratly Islands. However the agreement, which is expected to be formally signed in the capital on October 15th, will not come into effect until after a nationwide referendum and it is likely that Bangsamoro will not come into existence until 2016.

There is also concern that the peace pact does not include the smaller separatist groups operating in Mindanao. One organisation, the Bangsamoro Islamic Salvation Front, has already condemned the agreement.

But both Manila and Washington will be most concerned with the reaction of the radical, Al-Qaeda-linked Abu Sayyaf group to the deal.

Abu Sayyaf has been responsible for a string of kidnappings and killings in recent years, and US Special Forces have been training the Philippines military in their fight against them since 2002.