Philippine Muslim leaders caution that a military exercise with the United States, which is aimed at al-Qaida-linked rebels, could target other Muslim separatist groups. They say the exercise could escalate decades of conflict in the southern Philippines.

Some Muslim leaders say the presence of the U.S. soldiers in the southern Philippines brings back memories of America's attempt to occupy Muslim areas in the early 1900s, when the country came under American rule.

Abhoud Syed Lingga is chairman of the Bangsamoro's People's Consultative Assembly and an advisor to the Moro Islamic Liberation Front (MILF), a group that is in peace talks with the government. At a news conference Thursday, he says he fears the U.S. war on terrorism will spread to other Muslim groups in the Philippines. This, he has said, would hinder peace negotiations between the government and the MILF.

"What about if these Philippine forces will enter into the MILF camp, together with them are the Americans and if the MILF will shoot at them and it happens that an American soldier is hit and dies? That would again justify bombing of MILF camps," he said.

The Philippine military said the Abu Sayyaf has sought refuge in MILF camps on Basilan Island and has joined renegade members of another Muslim group, the Moro National Liberation Front.

Many Philippine politicians and activist groups oppose the joint exercise, called Balikatan, as a violation of the Philippine Constitution.

Vice President and Secretary of Foreign Affairs Teofisto Guingona told Philippine senators Thursday that U.S. troops will not engage in combat operations. He says the Balikatan exercise will be under the direction of the Philippine military, and that the government will put national interests first as it participates in the U.S.-led war on terrorism.

"If by chance U.S. policy goes against those policies of ours then we have to follow ours, and not necessarily that of the United States," he said.

The exercise is aimed at the Muslim extremist rebel group, Abu Sayyaf. The group is known for its high-profile kidnappings, and it currently holds hostage two Americans and a Philippine nurse on the island of Basilan.

In another development Thursday, military officials denied a local newspaper report that the American hostages have been released for two million dollars in ransom. The missionary couple was abducted in May from a beach resort, and a military hunt for the Abu Sayyaf has failed to rescue them.