Manila, March 3, 2003 -- Philippine and US security officials are to meet again in the coming weeks to hammer out ground rules for a new counter-terror mission in the troubled southern Philippines this year, President Gloria Arroyo's spokesman said Sunday.

The security cooperation hit a snag last week when US Defense Secretary Donald Rumsfeld and Filipino counterpart Angelo Reyes failed to come up with the "terms of reference" for the proposed "Balikatan O3-1" exercises on the island of Jolo.

Suggestions from Washington that US special forces and elite troops take part in actual combat operations had sparked controversy here because the constitution prohibits foreign troops on local soil.

Presidential spokesman Ignacio Bunye said Sunday that one good thing that came about from the Rumsfeld-Reyes meeting in Washington was that "there was a fundamental agreement" that any exercise would be subject to Philippine law.

"So I think, because of this it would be easier to work out details of this Balikatan 03-1," Bunye said over DZMM radio. "There would be subsequent meetings in the coming weeks and our proposal is for us to use the terms of reference of the Balikatan 02-1."

Balikatan 02-1 was the codename for the anti-terror exercises held between US and Filipino troops in the southern island of Basilan last year.

The six-month operation led to the rescue of the last US hostage held by the Muslim kidnap gang Abu Sayyaf and the death of a top rebel leader.

While US "advisers" were allowed to observe at the company level last year, they were barred by the "terms of reference" from combat operations and were not allowed to fire weapons unless under direct attack.

Bunye said there appeared to have been a misunderstanding, after a US defense official earlier announced that US troops would be allowed to take part in actual combat on Jolo island, a traditional stronghold of Muslim rebels.

"But Secretary Rumsfeld has said that they'll consider our own particular circumstances and what we understand from that is there should be consultations in areas where the Balikatan would be held," Bunye said.

Upcoming discussions for the mission "would be lower level meetings", Bunye said, adding that details could be made available only after specific agreements are made.

President Arroyo last week gave the military a 90-day deadline to crush the Abu Sayyaf, a small group of Islamic militants wanted for kidnapping and murdering Christians and foreigners in recent years.

The gunmen are still holding three Indonesian seamen and four Filipina Christian preachers in the jungles of Jolo.

Reported by: Sol Jose Vanzi

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