A Philippine priest named just days ago as chief government negotiator in talks with Muslim rebels has quit after rebel leaders objected to his appointment. As the search for a replacement goes on, analysts say the episode shows communications between the sides are weak at a time when the talks are approaching a crucial phase. Douglas Bakshian reports from Manila.

Catholic priest Eliseo Mercado has been close to the peace process in the Philippine south for a long time. He is former president of the Catholic-run Notre Dame University on the southern island of Mindanao, and served as an independent ceasefire monitor there in the late 1990's.

He says he stepped down Wednesday as lead government negotiator because the rebel Moro Islamic Liberation Front, or MILF, wanted him to maintain his independent position outside the peace process.

"The MILF does not like that I be partisan and with the government. But that I should be rising above the government and the MILF and help in the peace process, advising both," he said.

Mercado's selection as the top government negotiator was revealed only last Saturday, after the sudden resignation of Sylvestre Afable, who served more than four years in the post. Afable gave no explanation for his resignation, but reports said he was tired of resistance from hardliners in President Gloria Arroyo's cabinet, who felt too many concessions had been made to the rebels.

The Philippines is a mostly Roman Catholic nation but there is a concentration of Muslims in the south. A violent Muslim separatist insurgency there has taken more than 120,000 lives over three decades.

The MILF says the government should have consulted with the rebel group and with the government of Malaysia, which is facilitating the talks, before naming a new negotiator.

"What is important is that whatever is the choice of either party should be communicated first to the other party. Because the discretion to select a negotiator is not an absolute discretion. It has something to do with the other side of the equation," said Mohagher Iqbal, who heads the MILF negotiating team.

The rebels earlier complained that Mercado did not have Cabinet-level status, and selecting him was a downgrading of the peace process. Mercado, shortly before stepping down, had said he would receive cabinet rank.

Whatever the real reason for the MILF's objections, Julkipli Wadi, professor of Islamic Studies at the University of the Philippines, says this episode is a bad sign for the talks.

"There was a misstep, I think, on the part of the government in its attempt to appoint a new peace negotiator in the person of Father Mercado without consulting the MILF. It shows that the communication lines?is quite on and off," said Wadi.

The government says the peace process is at a critical stage on the issues of territory and self-determination, which are at the heart of the Mindanao dispute.

Muslims claim Mindanao as their ancestral homeland, but much of the area came under control of Christian settlers in the past century, which helped fuel the separatist insurgency.