President Arroyo is keen to make peace with communist and Muslim insurgents

"Both parties have agreed to continue undertaking goodwill and confidence-building measures to enhance the atmosphere and promote the progress for the resumption of the peace negotiations," the joint statement said.

Earlier this week, President Macapagal Arroyo ordered a one month ceasefire with communist rebels in 11 provinces on the main island of Luzon after a gunbattle between guerrillas and soldiers.

A police chief inspector who was seized in November 1999, died from wounds he sustained during the fighting.

The ceasefire was designed to enable negotiations with the rebels to allow the safe release of their remaining captive, an army major.

Prisoners released

After she took office in January, President Arroyo ordered a resumption of talks with the communists and the Muslim separatists operating in the south.

She has released 15 communist and Muslim insurgents over the past week in a gesture to both groups.

Ms Arroyo has also called a unilateral ceasefire with the Muslim insurgents in the southern Philippines.

The communists, who include an 11,000-strong armed wing, the New People's Army (NPA), have been waging a Maoist rebellion to seize power for decades.

They pulled out of peace talks with the government of the then President Joseph Estrada in 1999 after the Philippines signed a military training agreement with the United States.