The Philippine government has resolved a key hurdle in peace talks with Muslim rebels, it announced early Sunday, bringing it closer to ending an insurgency that has claimed tens of thousands of lives.

After six days of negotiations, Manila said it struck a compromise on sharing local revenues with a Muslim self-rule area in the Mindanao region that is expected to be led by the Moro Islamic Liberation Front (MILF).

"The peace panels have completed the wealth-sharing annex at 10:30 tonight, July 13," the government negotiators said in their official account on the micro-blogging site Twitter.

The agreement paves the way for the two sides to decide how to divide up income from taxes and natural resources in the self-rule area.

The terms will be signed within minutes, the statement added without giving further details. The talks are being hosted by Malaysia.

The negotiations aim to create an autonomous region for the Muslim minority in Mindanao, the southern third of the mainly Catholic nation of 100 million.

The 12,000-member MILF has waged a guerrilla war for a separate Islamic state in Mindanao since the 1970s that has claimed an estimated 150,000 lives.

President Benigno Aquino's government and the MILF signed a preliminary deal in October outlining the broad terms for a peace treaty that would be signed before he ends his six-year term in 2016.

The talks in Kuala Lumpur aimed to spell out the details of the October 2012 template.

After the wealth-sharing deal, the negotiators are expected to move on to the nitty-gritty of how power will be shared between the national government and the Muslim self-rule area, and finally the disarmament of the MILF.

The previous week's talks had been held amid deadly attacks by a splinter guerrilla group that left 15 people dead on Mindanao.

In the latest skirmishes on Saturday, the Bangsamoro Islamic Freedom Fighters killed two soldiers and lost five of their own after an ambush of a military truck led to a heavy firefight, the local military spokesman said.

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