The Farc rebels want thousands of their jailed comrades freed

"It's an answer that says no, but also yes," Interior Minister Sabas Pretelt told reporters.

Last week, President Alvaro Uribe offered to release 50 Farc fighters in return for hostages.

But a statement posted on the rebel website on Sunday dismissed the proposal as "absurd" and "unrealistic".

The rebels - from the Revolutionary Armed Forces of Colombia (Farc), the country's largest group - said it did not allow them to negotiate terms, including how many hostages would be released.

The Farc also said that Mr Uribe - who is seeking to modify Colombia's constitution so he can run for re-election in 2006 - was making the offer to advance his political ambitions.

On Monday, however, the government and relatives of rebel hostages said they were holding out hope that an exchange deal could be reached.

Rejection 'not outright'

Mr Pretelt pointed to a line in the rebel statement that reads: "Who is going to negotiate in the government's name? Our people are ready", as evidence that the rebels wished to see negotiations go ahead.

"The government is willing to proceed whenever they accept minimum conditions on the persons that are freed on the part of the government," Mr Pretelt said.

The Farc are rejecting this proposal, but not the negotiation Yolanda Pulecio Mother of Farc hostage Ingrid Betancourt Press cynical on prisoner swap

The mother of Ingrid Betancourt, one of the Farc's most prominent captives, said she too believed the rebels' statement did not constitute an outright rejection of an exchange.

"The Farc are rejecting this proposal, but not the negotiation," Yolanda Pulecio reportedly said.

"I don't see that everything is closed - they're saying they don't like the form in which the government made the offer, but that a way can be found to negotiate," she said.

Government U-turn

The guerrillas are holding some 60 hostages they say they are prepared to exchange, including three US citizens, former presidential candidate Ms Betancourt and scores of Colombians held for ransom money.

President Uribe: Seeking a second term

Until now, the Colombian government had ruled out prisoner exchanges, arguing that they would lead to more kidnappings.

Hostages' families - and perhaps, the US government - have been pushing Bogota to alleviate their plight, says the BBC's Jeremy McDermott in Bogota.

In the past, the rebels have said they want the government to release thousands of their jailed colleagues and allow them to rejoin their violent struggle for a Marxist state.