Local political leaders in the southern Philippines have started arming civilians to protect against Muslim rebel attacks, a dangerous development that could further escalate violence, Amnesty International said Friday.

Tens of thousands of civilians have been displaced and dozens killed in recent attacks blamed on Moro Islamic Liberation Front rebels, prompting the government to scrap a preliminary peace accord calling for an expanded autonomy for minority Muslims.

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The rebels, who have been fighting for Muslim self-rule in the predominantly Roman Catholic nation's south for decades, said they regretted the violence but rejected government demands to hand over two commanders blamed for recent civilian deaths.

The military has stepped up pressure on the rebels by launching limited air strikes and artillery assaults on suspected guerrilla hideouts in Maguindanao province, on southern Mindanao island.

Human rights group Amnesty International said the rebels "should be held to account" for serious violations of international law, but also warned that the deployment of civilian militias on the government side "can set off a chain of reprisals and only increase the danger facing civilians."

The Philippine military has a decades-old policy of arming civilian militias to reinforce security forces and protect local communities.

Following Monday's rebel attack on five coastal towns in Lanao del Norte province in which guerrillas shot or hacked to death 37 people, Amnesty said that local politicians in nearby North Cotabato province supplied guns and ammunition to the civilians after security officials reportedly refused.

Similar reports were received from other predominantly Christian cities in the south, it said.

National police chief Avelino Razon confirmed in Manila on Wednesday that police were set to recruit and arm more civilian volunteers. He said 1,000 shotguns will be shipped to the south and an additional 12,000 weapons were being readied.

In the 1970s, notorious Christian militias known as "Ilagas" or "rats" were blamed for killing Muslim civilians and burning mosques. The Muslims had also formed "Barracuda" vigilantes who attacked Christians.

"Many people in Mindanao are terrified of a return to a period when armed Muslim insurgents and Christian vigilante `Ilaga' groups attacked civilians with impunity," Amnesty said.

Just weeks ago, a peace deal to end the decades-long insurgency had seemed within reach after government and rebel negotiators initialed an agreement on an expanded Muslim autonomous region.

But Christian politicians in areas that would be affected challenged the deal in the Supreme Court, triggering the attacks by the rebels.

Solicitor General Agnes Devanadera told the Supreme Court on Wednesday that "circumstances have changed" after the recent attacks and the government will no longer sign the agreement.

Rebel negotiator Iqbal said resuming talks was "like opening a can of worms." He hinted that the impasse could set off an escalation in fighting.