A state of emergency has been declared on the southern Philippines island of Jolo after a deadline imposed by kidnappers holding three aid workers hostage expired.

The Abu Sayyaf group had threatened to behead one of three Red Cross workers held hostage if the military did not pull back its forces from their stronghold by 1400 local time (0600 GMT) on Tuesday.

There has been no word from the group since the deadline passed, although they had earlier warned there would be no extensions.

The government has indicated it is prepared order an all out military offensive against the group if any of the hostages are harmed or in imminent danger.

Shortly after the deadline expired on Tuesday the governor of Jolo declared a
state of emergency on the island authorising him to order an attack on the kidnappers.

It was not immediately clear however if an attack was imminent.

'Impossible' demand

Abu Sayyaf commanders had demanded the government withdraw its forces well away from their stronghold and pull back to two villages near the provincial capital.

However, government officials said the demand was "physically impossible", and that the troops cannot be moved within the 24 hours they have been given.

Al Jazeera's Marga Ortigas, reporting from Manila, said that both sides appeared to have given up on reaching a compromise.

"The government is saying it is logistically impossible to comply with this demand, and the Abu Sayyaf are saying that it is all or nothing," she said.

"People on Jolo island are very afraid, and both Muslims and Christians are said to be conducting prayer vigils."

Until a recent withdrawal, the Abu Sayyaf were surrounded by more than 1,000 government troops.

Conceding to earlier demands, Philippine government forces moved back from the Abu Sayyaf stronghold by 10 to 15km, hoping that the group would release one hostage.

But the fighters insisted the troops must pull back further still - a demand the government says would lead to anarchy.

US and Philippine intelligence agencies say the Abu Sayyaf has links to Jemaah Islamiyah, a regional group believed to be fighting for a pan-Asian Islamic state, and is said also to have had links with al-Qaeda.

The group has also been blamed for the 2004 bombing of a ferry near Manila Bay that killed at least 100 people.

Calls for release

The Pope has joined appeals for the release of the captive aid workers [Reuters]

The Vatican said in a communiqué on Monday that Pope Benedict XVI "wants to raise his voice and urge that humanitarian sensibility and reason prevail over violence and intimidation."

"The Holy Father ... asks for their release and calls on the authorities to favour a peaceful outcome to the tragic situation."

The president of the International Committee of the Red Cross (ICRC) reiterated appeals for the hostages' freedom.

"Our message to Abu Sayyaf is: Please spare and release Mary Jean, Eugenio and Andreas," Jakob Kellenberger told the Associated Press.

"All they were doing was helping people in need in your area. There is no ideology or religious law that could justify killing them."