We hope the discussion... will result in the accelerated release of political prisoners and other measures

Luis Jalandoni, chief communist negotiator

Representatives on both sides expressed cautious optimism ahead of the talks, which are taking place in the Norwegian capital, Oslo, after a break of two years.

But fundamental differences on crucial issues suggest the search for a compromise solution to a conflict that has killed and displaced thousands of people will not be easy.

Reaching a negotiated solution to the Philippines' various long-running rebel insurgencies is one of the prime objectives of President Gloria Arroyo's three-month-old administration.

Deadline

President Arroyo wants peace

She has set a target date of October 2002 for the achievement of an armistice agreement with the communist National Democratic Front.

It marks a sharp departure from the hard-line confrontational approach of her ousted predecessor, Joseph Estrada.

But although the release of several dozen jailed guerrillas and the return home of several exiled NDF leaders have created a promising atmosphere, the task facing the negotiators gathered on neutral territory in far-off Norway is a daunting one.

Heavy demands

The rebels are demanding a long list of socio-economic, political and constitutional changes as the price for ending a Maoist rebellion that began 32 years ago.

Land reform meant to improve the lot of the impoverished rural masses, the bedrock supporters of the rebels, is one pivotal issue.

But what may prove even more contentious is the NDF's demand that Manila cut off all military ties with the United States and withdraw from the World Trade Organisation.

Mrs Arroyo's room for manoeuvre will be restricted by the military.

Its priority is the restoration of territory held by the NDF's 11,000-strong military wing, the New People's Army, and the surrender of their weapons.

These are only initial contacts but they could set the tone for talks with the country's other main guerrilla group, the Moro Islamic Liberation Front, which are planned to resume within the next few months.

In the long term, much is at stake.

Politically-inspired unrest has been one of the prime factors impeding the Philippines' economic development.