For the first time, the Philippine government has offered self-determination to the Moro Islamic Liberation Front, or MILF, which is fighting for a Muslim homeland in the southern Philippines. While both sides welcome the development as a breakthrough, much work remains ahead to hammer out the details of any settlement. Douglas Bakshian reports from Cotabato, in the southern Philippines, on the latest in a troubled peace process.

The Philippine government's offer to grant extensive self-government rights to Muslim communities in the south is unprecedented.

"It is a breakthrough because since the peace process started in 1975 this is the first time that the government is offering recognition of the right to self-determination," said Rudy Rodil, with the government's negotiating panel.

The Philippines is a mostly Christian nation, but the population in the southern islands is largely Muslim. For centuries, Muslims have complained about mistreatment by the national government in Manila. Over more than 30 years, a violent separatist insurgency has claimed more than 120,000 lives in the south.

Al-Haj Murad Ebrahim leads one of the insurgent groups, the Moro Islamic Liberation Front. He says the new offer is a step forward for the Bangsamoro people, as the MILF calls the Muslims of Mindanao.

"It has been the aspiration of the Bangsamoro people for their rights to self-determination," he said. "And it is the first time that the Philippine government has officially pronounced that they are willing to grant self-determination to the Bangsamoro people. It can be a breakthrough."

But what does self-determination mean? It has not been clearly defined and will be determined in negotiations. The MILF broadly defines it as the right of the people to determine their political status and pursue their economic, social and cultural development.

Officials say under the offer, the Manila government would treat the proposed Muslim homeland as indigenous land. But just what residents would control has yet to be worked out.

The MILF says residents could control rights over Mindanao's rich natural resources. The local government might also control taxation, the MILF suggests. The sides are still defining terms and not publicly discussing specifics.

However, Manila officials say the offer does not mean an independent state. The central government would keep control of defense, foreign affairs, the monetary system and the postal system.

Efforts to end the insurgency bogged down in September when negotiators disagreed over the size of the proposed Muslim homeland.

This prompted the government to seek a new approach - the self-determination option. Earlier negotiations had focused on territorial resources, governance, and the concept of ancestral domain - the area where Muslims ruled before the arrival of the Spanish and Americans.

Benedicto Bacani heads a policy research organization called the Cotabato Institute for Autonomy and Governance. He calls the new offer a significant development.

"There is in my mind a paradigm shift on the part of the government," he said. "They have realized that this cannot be resolved purely through a military solution. And so the proposal of government now revolves around self-determination. So this is the first time that they've admitted using the word self-determination."

But other analysts say the new approach may just be a shift in attitude by the government, not necessarily in legal content.

Manila reached a separate peace accord with another Muslim group, the Moro National Liberation Front or MNLF, in 1996. That created the Autonomous Region of Muslim Mindanao, which had only limited autonomy. Many consider the arrangement ineffective.

MNLF officials complain the region has no fiscal autonomy, so money comes from the national government, which determines how it is spent. The MNLF wants the regional government to determine where the money goes.

The MILF broke away from the MNLF decades ago, and takes a more hard-line approach to demands for a Muslim homeland.

Some Muslims in the south say the change in Manila's position may be just in time to keep new, radical splinter groups from forming in the region.

"If the Bangsamoro people are not satisfied there will be smaller groups, pocket groups, like the Abu Sayyaf or the Pentagon kidnap gang or even smaller conglomerations that might create a more hostile environment," said Ishak Mastura, a regional secretary in the trade department of the existing Autonomous Region. "That's what the international actors, the government is afraid of, that we can actually spawn fourth-generation war groups."

No date has been set for the resumption of formal peace talks, although the government has said it wants to go back to the negotiating table before the May 14 legislative elections.