KUALA LUMPUR - The Philippine government and Muslim separatists have a good chance of achieving a "just and lasting" peace deal, a government official said Tuesday as talks resumed after a 16-month impasse.

The two-day negotiations in the Malaysian capital are aimed at ending a decades-old separatist rebellion by the Moro Islamic Liberation Front (MILF) in the southern island of Mindanao that has left more than 150,000 people dead.

Rafael Seguis, the government's top negotiator, said in an opening statement that the process launched in 2001 was "now formally back on track."

"I believe -- and I am sure that we all share this optimism -- that we will be able to forge a peace settlement that is just, lasting, acceptable, and truly beneficial to the Muslim Filipinos in Mindanao, and to the entire Filipino people," he said.

"We have a reason to celebrate the milestone we are about to build today. But the task ahead of us is still great. The challenges we have to surmount remain high. There is a lot of work to do."

The MILF, the largest of the Philippines' Muslim rebel groups, also sounded a positive note on the talks, which collapsed after it launched deadly attacks across Mindanao in August 2008.

"We expect a fruitful outcome of the peace talks and we hope both sides would be able to sign an agreement beneficial to all," Eid Kabalu, a senior MILF leader, told AFP.

The 2008 attacks broke out after the Philippine Supreme Court outlawed a proposed deal that would have given the MILF control over large areas of the south that were claimed by the rebel group as its "ancestral domain".

Over 700,000 people were displaced at the height of the fighting and nearly 400 were killed. More than 250,000 people remain in evacuation centers across Mindanao.

A new cease-fire was signed in September, paving the way for the resumption of the talks.

Since then, Mindanao has been rocked by a massacre in Maguindanao province that left 57 people dead, and the imposition of martial law there as the government battles militiamen loyal to the powerful Ampatuan clan.

The government had earlier backed the clan as part of a strategy to contain the 12,000-strong MILF.

In a sign of the changed mood, the government has excluded MILF areas in Maguindanao from the new security measures, and said the group had offered to help track the Ampatuans.

The government has also given the MILF credit in securing the release last month of 79-year-old Irish priest Michael Sinnott, who spent a month in captivity in the jungles of the southern Philippines.

The resumption of the talks came after the MILF and the government approved the establishment of an International Contact Group (ICG) comprising Britain, Japan, Turkey and civil society groups.

MILF chief negotiator Mohagher Iqbal said the ICG serves as a guarantee that both the government and MILF will comply with all signed agreements and "prevent a repeat of the debacle" of 2008.

Seguis has said that Manila is aiming to secure a peace deal with the MILF before President Gloria Arroyo steps down next year.

Arroyo opened the peace talks in 2001 in an effort to end the bloody secessionist war in the restive but mineral-rich region of Mindanao.

The two sides are not expected to make any statement on the progress of the negotiations until after the meeting ends on Wednesday.