Ten years ago this week, the government of the largely Roman Catholic country signed a deal with a group of Muslim insurgents called the Moro National Liberation Front (MNLF) that was meant to end decades of conflict. Instead, it sowed more strife.

Manila had raised hopes a peace deal could be signed this month with another Muslim rebel group. But talks have stalled over demands by the Moro Islamic Liberation Front (MILF) for more territory in an enlarged Muslim homeland.

Negotiations, brokered by Malaysia, are due to resume next week but neither side has shown much urgency for a breakthrough.

In fact, both President Gloria Macapagal Arroyo and MILF Chairman Ebrahim Murad have good reasons for simply maintaining the status quo with its fragile ceasefire and round after round of exploratory talks.

Forging a peace deal for the impoverished south is likely to provoke rival Muslim groups and local Christian communities with competing claims on land and governance, as well as upset military commanders whose jobs are intertwined with conflict.

DELAYS BREED RISKS

Arroyo, who has survived two impeachment attempts and many alleged plots, cannot afford to upset powerful players such as the army, whose members have been part of at least a dozen coup attempts -- two of them successful -- in the last 20 years.

There is also little pressure from the public or media to resolve a conflict that seems remote to many Filipinos, most of whom have not been to the southern islands of Mindanao and Sulu.

But the fighting, which has killed more than 120,000 people and displaced at least 1 million since the early 1970s, risks flaring up again if Manila and Muslim leaders do not come up with a deal that addresses the frustrations of a new generation.

"The longer this goes on without a resolution, the greater the potential for the younger, more militant people and the MILF members opposed to the talks to gain in strength," said Malcolm Cook, programme director for Asia and the Pacific at the Lowy Institute for International Policy.

A failure to hammer out agreement also plays into the hands of Abu Sayyaf, the smallest and most militant Islamic separatist group in the Philippines, which relies on the acquiescence of locals to maintain its bases on remote southwestern islands.

"I don't think all the dangerous guys with guns will go away," said Tom Green, executive director of risk consultancy Pacific Strategies & Assessments.

"But it's in everybody's interest to try and get the MILF and government to move forward," he said. "We feel that would dry up a lot of the water that the Abu Sayyaf swims in."

CYCLE OF VIOLENCE

No one wants to repeat the mistakes of the 1996 agreement between the government of then President Fidel Ramos and the MNLF, which partly failed due to weak implementation.

Accustomed to guerrilla warfare in the jungle, MNLF Chairman Nur Misuari and his lieutenants were not prepared for office life as administrators.

Angered by the government failing to deliver all the funds it had promised after accusing him of mismanagement, Misuari led a botched rebellion in 2001 and is now under house arrest.

The former university professor, still an influential figure in the south, has been given 18 hours leave to attend a ceremony commemorating the signing of the 1996 peace deal this weekend in the port city of Davao.

To prevent a repeat of the failures of the MNLF deal, the government and the MILF have been running workshops, sponsored by the World Bank, to teach guerrillas about management tactics and balancing the books.

But even with better implementation this time round, an agreement could still tip the southern Philippines back into a cycle of violence because the talks have not yet addressed how to merge an MILF accord with what was promised to the MNLF.

The 1996 deal with the MNLF was a boon to the MILF, which opposed it as insufficient and saw its numbers rise as a result.

Now, their own deal, if it is ever signed, could result in a similar boost for the MNLF or Abu Sayyaf or a splinter group.

Efforts to seek accord have also skirted around ownership of the south's abundant seams of copper, gold and nickel, which remain largely untapped due to the insurgency.

Resolving a conflict that stretches back more than 400 years and involves the competing interests of fractious Muslim clans, Christian communities and at least 18 indigenous tribes requires vision and commitment.

But Arroyo, who rang a peace bell in Manila on Friday, is focused on other pressing issues such as the economy, a communist insurgency and allies facing congressional elections next year.

"I think the government is fairly satisfied with the status quo right now," said Green. "It (the south) is not hot enough to force their attention."