On the bad days, kidnapped Italian Red Cross worker Eugenio Vagni would imagine how his months-long jungle captivity in the southern Philippines would end: with his decapitated head in a basket.

Gaunt, exhausted and barely able to walk due to a hernia, the 62-year-old engineer did not believe his Al Qaeda-linked captors when they told him he would finally be freed — until a government negotiator showed up Sunday morning to escort him away.

Vagni was reunited with his wife and daughter Sunday in Manila.

After six months of fraught negotiations and periodic pursuit by the Philippine army, his Abu Sayyaf captors released him after the government agreed to free the two arrested wives of the kidnappers' leader.

Vagni had lost about 44 pounds (20 kilograms). He said he was fed mostly rice and fish by his captors, who treated him well, calling him "Apo," a local term of respect for the elderly.

The militants also helped treat his cholera and carried his backpack when he got tired.

Still, that did not ease his near-constant fear of being beheaded. He told ABS-CBN network Sunday that he often imagined seeing "my head in a big basket."

The Jan. 15 kidnapping of Vagni, along with two Red Cross colleagues from Switzerland and the Philippines, has raised fresh concerns over the Abu Sayyaf, a Muslim separatist insurgency that the government has long dismissed as a spent force of bandits.

The Red Cross kidnappings were the most high-profile of a recent spate of Abu Sayyaf abductions. Vagni's two colleagues were freed by the militants months earlier.

In Vatican City, Pope Benedict XVI felt relieved that the abduction was over and took Vagni's release as a "sign of hope and of faith," Vatican spokesman the Rev. Federico Lombardi was quoted as saying by the Italian news agency ANSA.

While Vagni's release brought relief, officials acknowledged the Abu Sayyaf threat was far from over.

The Abu Sayyaf featured prominently during a discussion of security concerns between CIA Director Leon Panetta and President Gloria Macapagal Arroyo in Manila on Sunday, said her security adviser, Norberto Gonzalez.

Washington has blacklisted the 400-strong group as a terrorist organization because its bombings, ransom kidnappings and beheadings of hostages have rattled the southern Philippines for decades. The group is suspected of receiving funds and training from Al Qaeda.

The militants have turned to kidnappings in recent years, raising concerns among Philippine and U.S. security officials that ransom payments could revive the group, which has been weakened by years of U.S.-backed offensives.

Sen. Richard Gordon, who heads the local Red Cross, said it is time for the government to reconsider a comprehensive approach that includes dialogue in ending the extremist threat.

However, the Philippine military threatened to renew full-blown offensives.

"Now that Vagni's safety is ensured," a military statement said, troops "shall pursue the perpetrators relentlessly and hold them accountable for these incident."

Vagni's brother, Francesco, told reporters in Italy that "there were moments that I believed he would never come back," ANSA reported.

Italian Foreign Minister Franco Frattini said in an interview with state TV that no ransom had been paid for Vagni's release.

But the government negotiator, Sulu Vice Gov. Lady Ann Sahidulla, said she gave 50,000 pesos ($1,042) to the militants "for cigarettes."

She said she agreed to release two arrested wives of Abu Sayyaf commander Albader Parad — she handed one of them over to Parad personally Sunday — because there was no evidence linking them to any crime.

The military arrested the women last week on suspicion they were supporting the Abu Sayyaf.

Sahidullah insisted it was not a "prisoner swap," adding that one of the wives had helped her persuade Parad to free Vagni, telling him many militants and troops had died due to the abductions.

The latest Abu Sayyaf hostage crisis drew to a close with Vagni's flight to Manila, where he was reunited with his Thai wife and daughter, hugging and kissing them.

Waving to waiting journalists, they boarded a convoy and vanished from view.