Manila has downplayed warnings by a top U.S. official that the southern Philippines is becoming a haven for Muslim extremists, and says progress is being made against terrorism there.

The number-two U.S. diplomat in Manila, Joseph Mussomeli, has warned in a recent interview that the southern Philippine island of Mindanao is so lawless that it risks becoming a haven for Islamic extremists.

He pointed to alleged bomb training by regional terrorist group, Jemaah Islamiyah, in cooperation with factions of the Muslim-separatist Moro Islamic Liberation Front.

But a Philippines government spokesman on Monday rejected the charges, saying progress is being made against terrorism and poverty in Mindanao and that Mr. Mussomeli "is out of touch" with the situation on the ground.

Mr. Mussomeli made the comments in an interview with an Australian television network. He also said that many in the Moro Islamic Liberation Front, which is to resume peace talks with the government next week, do not accept that some of their colleagues are "in bed" with Jemaah Islamiyah. The interview transcript was released by the embassy.

He added that it was necessary for the Moro Islamic Liberation Front to sever ties with these members if they "wanted to be taken seriously as a legitimate group."

National Defense Committee Chairman Congressman Roilo Golez downplayed Mr. Mussomeli's comments.

"I feel it is not that serious," he said. "There are problems there. And while some of the observations may be factual, but from the organizational point of view it may not be accurate - meaning that there are some groups within the MILF that are working independently, that are out of control."

Mr. Mussomeli stressed that the U.S. government continues to support the peace efforts by the Moro Islamic Liberation Front and the Philippine government. He noted Washington's offer of $30 million in aid to Moro areas if peace is declared.

Around 85 percent of Filipinos are Catholic, but a minority are Muslim and many of those live in the poverty-stricken south.

The region has a reputation for lawlessness and is home to a number of separatist movements and violent gangs.

But Professor Julkipli Wadi, from the Islamic Institute at the University of the Philippines, says the south is more peaceful than it has been for years.

"It has relatively subsided except that there are some skirmishes in some areas, but apart from that I think Mindanao has in a sense, relatively speaking, has become quite peaceful now," he said.

Small groups of U.S. military advisors are currently training Filipino military units in the southern Philippines.