Thailand's new military-installed interim prime minister prepared Friday to name a Cabinet, as a leader of a Muslim rebel group welcomed government overtures to bring peace to the country's troubled south.

Prime Minister Surayud Chulanont, appointed by a military council after a Sept. 19 coup, said Friday that he will submit a Cabinet lineup to King Bhumibol Adulyadej for endorsement this weekend.

"I think it will be ready by Saturday or Sunday," he said. Only after the king approves the list can it be publicly announced. Surayud has previously said the lineup will be announced next week.

The military council that staged the coup has agreed to hold talks with Muslim rebels involved in a bloody insurgency in the south.

CountryWatch: Thailand

The ousted government of former Prime Minister Thaksin Shinawatra had pursued a hardline policy in the country's three southernmost provinces, the only ones with Muslim majorities in predominantly Buddhist Thailand. More than 1,700 people in the area have died from sectarian violence since an Islamic separatist insurgency flared in January 2004.

Gen. Sondhi Boonyaratkalin, who led the coup, said Thursday that officials from certain rebel factions had contacted a top army officer and requested talks.

"I have agreed to the talks," Sondhi said. "I stress that these will be talks, not negotiations." He did not indicate if any date had been set.

Wan Kadir Che Man, a leader of the Bersatu rebel group — believed to be an umbrella group of Muslim insurgents — confirmed that members of his organization had been in contact with "certain Thai authorities" about holding peace talks.

"I hope that the talks could be started as soon as the country is back to normalcy. We, as citizens, should play our role to stop the present killings," he said in an e-mail Friday to The Associated Press.

"Each side must realize that it could not achieve a total victory," he said. "The present government should know by now that the confrontational policy of the previous government was a failure."

Click here to go to FOXNews.com's Asia Center.

Sondhi's coup was welcomed by many Thais, who saw the ouster of Thaksin as a good chance to ease the violence in the south.

The new Cabinet is expected to include respected technocrats and political figures with clean backgrounds. The military council that ousted Thaksin accused his government of corruption and is investigating the allegations.

At least six prominent people have said they have agreed to join Surayud's Cabinet. Central Bank Governor Pridiyathorn Devakula is expected to become finance minister, while the executive chairman of Bangkok Bank, Kosit Panpiemras, and the Commerce Ministry's former permanent secretary, Krirkkrai Jirapaet, are also expected to take economic-related portfolios.

Bunrod Somtad, the army's former chief of staff and a close friend of Surayud, is expected to become defense minister.

The military ousted Thaksin while he was on an official trip in New York. On Tuesday, in a letter sent from London, he resigned as leader of the Thai Rak Thai party, which he founded, funded and led to three election victories.

Surayud is to serve as prime minister until a new constitution is enacted and an election held in October next year.