President Arroyo will be up for re-election in May

Details are being agreed by the two sides, along with Norway ,which has helped broker the deal and may also host the talks.

The government suspended talks in Oslo three years ago, after a series of attacks by the rebels on politicians.

President Arroyo linked new talks to her reform plans ahead of elections.

The government is also moving towards talks with the Moro Islamic Liberation Front - the largest rebel group in the Philippines.

Securing peace deals with the two major rebel groups in the country would improve security and boost investor confidence, both of which are likely to be important issues when the presidential election takes place on 10 May.

"I shall pursue peace because it is morally right, and it is required by our national interest," Ms Arroyo said in a statement announcing the proposed resumption of negotiations with the communists.

However, she said the security forces would remain on high alert to prevent further attacks by the New People's Army (NPA), the armed wing of the communist movement.

Influence

Eight people were killed and nine were wounded last weekend when NPA guerrillas attempted to burn down a power station south of Manila and ambushed a member of the House of Representatives.

Norway has hosted several sessions of exploratory talks between the government and the communists over the last year.

If the talks take place, they will be the first since the United States, Canada and the European Union declared the communists terrorists in 2002.

The Philippine military has said that the number of NPA rebels now stands at around 8,800 with their influence remaining strong in the eastern part of the country, from the main island of Luzon in the north to Mindanao in the south.

The BBC's correspondent in Manila, John Mclean said that in recent years, the government has ceased to consider the communists a threat to national security, regarding them instead as "a 9,000 strong extortion gang. "