MANILA : Philippine government and Muslim separatist negotiators made a breakthrough in stalled peace talks, paving the way for formal negotiations to resume soon, officials said Wednesday.

Government representatives and the Moro Islamic Liberation Front (MILF) reached a deal on the controversial issue of "ancestral domain" in the Muslim-populated areas that the group claims as their homeland, said presidential peace adviser Hermogenes Esperon.

Government envoy Rodolfo Garcia and MILF representative Mohaqer Iqbal signed off on their informal discussions in Kuala Lumpur, which has been hosting the negotiations, Esperon said.

Formal peace talks with the group, which signed a ceasefire with Manila in 2003, have stalled for months due to disagreements over what authority the MILF would exercise over the areas they claim as their ancestral homeland.

Esperon said the two sides will meet July 24 to set the date for the signing of a memorandum of agreement "that will pave the way for the resumption of formal talks," Esperon said.

President Gloria Arroyo had been informed of the development and was "very happy. She is elated," Esperon said.

The nearly four decades-old Muslim separatist rebellion has left thousands dead and left Mindanao, the southern third of the predominantly Roman Catholic country, mired in poverty.

Manila has been under pressure to reach a peace settlement to undercut support by some MILF elements to Muslim militants linked to Jemaah Islamiyah, which has been blamed for deadly attacks across Southeast Asia.

Esperon told AFP that through the informal discussions, "we have resolved several differences, especially those pertaining to the ancestral domain issue."

He said this included "the jurisdiction and control of the natural resources" of the areas to be considered the ancestral domain.

MILF spokesman Eid Kabalu said though a formal agreement had yet to be signed, "apparently, they will be able to resolve the remaining issues."

Despite the ceasefire, sporadic clashes between the government and MILF forces occur in the southern Philippines.

- AFP /ls