MANILA, May 6 (Reuters) - The Philippines' largest Muslim rebel group on Friday said it had dropped a plan to seek secession after Malaysia threatened to stop facilitating peace talks on ending a long-running insurgency in the south of the mainly Roman Catholic state.
The Philippine government and the separatist Moro Islamic Liberation Front (MILF) have been holding talks for nearly 12 years to find a political formula to end fighting that hobbled development in the poor but resource-rich southern region. The insurgency has killed 120,000 people and displaced 2 million.
The rebel group's chief negotiator, Mohagher Iqbal, said the MILF had planned to introduce an option to secede in its proposed agreement with the Philippines, modelled on the peace deal in southern Sudan.
"The Malaysians twisted our arm into dropping that clause, threatening to abandon the peace talks," Iqbal told members of the Makati Business Club, a powerful lobby group with links to President Benigno Aquino, during a dialogue in Manila.
"Clearly, we are not seeking an independent state, but something that the Moros can effectively govern themselves with little interference from the central government."
Iqbal said the rebel group had shown its peace formula to the government during talks in Kuala Lumpur in February and expected the see the government's counter draft in another round of negotiations late next month in Malaysia.
"There's nothing in our draft that will show we are seeking independence," Iqbal said.
The MILF's five-member peace panel has been meeting in Manila with leaders of the business community, civil society, religious institutions, academia and foreign missions to explain the rebels' peace formula.
In 2008, the Supreme Court threw out an ancestral land deal between the Manila government and MILF rebels on the grounds that there had been very little consultation.
Rogue Muslim rebel groups used the court decision to attack communities in the south that escalated into a conflict that displaced more than 750,000 people in late 2008. About 100,000 people remained in temporary shelter areas. (Reporting by Manny Mogato; Editing by Alex Richardson)
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