"With this positive development in the negotiations, the signing of the framework agreement on the ancestral domain is tentatively set early August this year,'' Esperon said.

Earlier this month, both sides agreed to expand the existing Muslim autonomous region in the south to include 712 villages, subject to the agreement of residents of the area in a vote.

Vote agreement

However, the talks stalled as the two sides disagreed on the date of the vote.
 
Ghazali Jaafar, the vice chairman of the MILF, said that the government wanted to hold the plebiscite after a final peace pact is signed, a move opposed by the rebels.

"There were some differences, but finally both parties agreed to hold the plebiscite within 12 months" of signing the ancestral domain agreement, Jaafar told The Associated Press news agency.

According to government sources, Muslims consistute at least five per cent of the country's 4.3 million people.

Philippine officials hope a peace accord will transform many areas of conflict in the south into bustling economic hubs instead of battlefields that could be a breeding ground of terrorism.

After tackling ancestral domain, regarded by both sides as among the most contentious issue, the negotiations are scheduled to advance to other issues, including governance.

The MILF is estimated to have about 11,000 fighters battling for self-rule.