'Peace talks breaking'
Mohagher Iqbal, MILF chief peace negotiator, warned of a return to full-scale hostilities.
"This is a grim scenario and I don not even want to think about it, but if the peace talks collapse then there will be war again in Mindanao," he said.
"The voice of reason is dwarfed by the voice of hatred and prejudice ... the peace talks are slowly breaking apart and if this continues, may God help us all," Iqbal said.
Muslim rebels had urged the Philippine government on Saturday to halt the military offensive.
Al-Haj Murad, chairman of the Moro Islamic Liberation Front, told a news conference at a rebel base near southern Cotabato city that the military has started indiscriminate attacks while pursuing rebel commanders blamed for leading the rampage.
The rebels, who have been fighting for Muslim self-rule in the predominantly Roman Catholic nation for decades, have said they regret a recent upsurge in violence and that the commanders responsible acted on their own.
Murad said peace talks should resume, but he repeated earlier rejections of a government demand that the rebel commanders who led the attacks be turned over to face the criminal justice system.
"We cannot subject our members to the laws of the government," Murad said. "We are a revolutionary force."
He suggested that the correct forum to deal with the rebel commanders should be a cease-fire committee involving the government, the rebels and an international truce motoring group led by Malaysia.
Murad said a deadline of sorts looms because the truce group's mandate is set to expire on August 31.
Gloria Macapagal Arroyo, the Philippine president, had on Thursday scrapped the deal after Christians and politicians in Mindanao objected to what they saw as an unconstitutional move to create an independent Muslim state.
The country's supreme court had earlier ruled against the deal.
Police special forces with shoot-to-kill orders immediately launched a manhunt for MILF fighters.
The rebel group has rejected government demands for the surrender of two renegade commanders, Ameril Umbra Kato and Abdullah Macapaar, also known as Bravo.
Both have a $113,000 arrest bounty placed on them for recent attacks on civilians.
On Friday, Eid Kabalu, a rebel spokesman, said that "fighting continued today with the military using air and ground assets, apparently to get Commander Kato".
Kato is said to have launched a series of attacks on villages and towns two weeks ago that killed scores and displaced thousands of people.
The MILF leadership has distanced itself from the attacks on the towns and blamed renegade fighters led by Bravo.
|The size of a Muslim homeland is at the centre of the stalled peace process [EPA]
Meanwhile local political leaders, fearing more violence, are reported to have have begun arming civilians to protect themselves against rebel attacks.
Ayesha Alonto-Datu Ramos, an expert on the Mindanao region, said some local leaders and politicians were profiting from the conflict.
She said: "...people that are benefiting from the war in Mindanao... pre-empted whatever good faith the government and the MILF may have had by the onslaught of this violence that they have had, and also by... ugly prejudicial statements and actions coming from the non-Muslims of the area, who are scared of losing whatever stakehold they might have in the Bangsamoro area."
Amnesty International said on Friday the rebels "should be held to account" for serious violations of international law.
It also warned that the deployment of civilian militias on the government side "can set off a chain of reprisals and only increase the danger facing civilians".
The Philippine military has a decades-old policy of arming civilians to reinforce security forces and protect local communities.