The accord between the Philippine government and the rebel Moro Islamic Liberation Front (MILF) would expand an existing autonomous region in the southern Philippines to add 712 more villages, provided residents approve the move in a vote.

American and Philippine officials hope a final peace accord can transform the resource-rich southern Philippines into a bustling economic hub instead of a breeding ground for "terrorists".

But the preliminary agreement has sparked protests from some Christian politicians and residents.

Some Catholic politicians say an enlarged Muslim region would lead to renewed sectarian violence and have vowed to obstruct the government's plan to conclude the peace accord.

Hermogenes Esperon, the presidential peace process adviser and former military chief, denied the government was giving away territory to Muslim rebels.

"No sovereignty is given here. This is for the benefit of Mindanao and the country," he said, adding it was "better to talk than fight".

The Supreme Court ordered the provincial politicians and the central government on Monday to explain their arguments on August 15, while the attorney-general was told to submit a copy of the accord by Friday.

'Temporary delay'

Romulo stressed it would only be a "temporary delay", saying the court delayed the signing because of "procedural issues" that have no impact on the merits and legality of the pact.

"I have full faith and trust in [the court] and they will find a way to decide in the shortest possible time," he said.

Many non-Muslims oppose the deal saying their land could be included in the settlement aimed at ending the 30-year-old insurgency that has claimed more than 120,000 lives.

The rebels - with an estimated 11,000 armed fighters - have been battling for self-rule in the predominantly Roman Catholic Philippines' volatile south for four decades, with thousands dying in the conflict.

The rebels said on Tuesday that the delay in the signing was embarrassing for the government.

Mohagher Iqbal, the chief rebel peace negotiator, said "the pact is a done deal" because both sides had already initialled the text of the agreement.

Rais Yatim, the Malaysian foreign minister whose country has brokered peace talks between Manila and the rebels, voiced hopes that the delay will not hurt a 2003 ceasefire that has eased clashes on the Philippines' southern Mindanao island.

"There ought not to be violence in any instance or in any area," Rais said, adding that Malaysia will remain part of a contingent of truce monitors in the southern Philippines that includes personnel from Brunei, Libya and Japan.

But violence already escalated on Monday, just hours after the court ruling, as fighters traded mortar fire with troops.

The military said an unknown number of MILF rebels fired mortar rounds at soldiers stationed near Midsayap town late on Monday.

It added that the rebels had taken positions in the town's outskirts, displacing more than 300 families, in violation of the 2003 ceasefire
accord.

"The MILF fired about a dozen mortars toward army positions," said Lieutenant-Colonel Julieto Ando, a regional army spokesman.

"We returned mortar fire, but there were no reports of casualties."

Ando said the rebels who attacked apparently ignored commands from the MILF leadership to leave the area as both sides negotiated a deal on territory.