Peace talks on ending a three-decade-old Muslim separatist insurgency in southern Philippines (search) opened Monday in Malaysia, with the rebels and the government saying they are hopeful of progress despite the tough agenda.

The three-day talks between Manila and the Moro Islamic Liberation Front (search) are being held behind closed doors in Port Dickson, a town south of Kuala Lumpur (search). Host Malaysia, which is brokering the talks, has barred journalists from entering the venue.

Officials have said the talks deal with ancestral domain, which refers to the cultural rights and property of ethnic Muslim tribes and management of natural resources — some of the thorniest issues to be addressed by the two sides.

"This is the first of many meetings on the question of ancestral domain. These talks are still exploratory in nature," said a joint written statement by MILF chief peace negotiator Mohagher Iqbal and government representative Silvestere Afable.

"We are exploring each others' positions. This is a very tough agenda but we are very hopeful of progress," said the statement, released through the Malaysian hosts.

The MILF, which has been fighting for a separate Muslim homeland in the mostly Roman Catholic Philippines for about 30 years, signed a July 2003 cease-fire ahead of Malaysia-brokered peace talks.

The 20-month-old truce has largely held despite isolated clashes, and the two sides have held informal talks in the past, culminating in the first formal talks that began Monday.

The MILF, which the Philippine military says has about 11,500 guerrillas with about 8,700 firearms, has been dogged by accusations that it is sheltering operatives of the regional terror network Jemaah Islamiyah.

The rebels, however, have condemned terrorism, denied any links to the al-Qaida-linked Jemaah Islamiyah, and offered one of their camps for inspection by the military. The group has also pledged to help the government hunt down foreign extremists.

Malaysia has a huge stake in a peaceful settlement of the rebellion in the southern Philippines because tens of thousands of Filipinos have been fleeing into Malaysia for years to escape the fighting.