The government supports Bush but many Muslim Filipinos do not

Correspondents say this is the first time that a high-ranking Philippine official has publicly spoken of such a link.

The Philippine parliament moved on Friday to draw up anti-money-laundering legislation, which President Gloria Arroyo says will be used to hunt down the funds of the Abu Sayyaf.

Both the Senate and the House of Representatives have hurriedly passed separate bills, but politicians are now working to reconcile the two. Critics say the legislation has been so watered-down that it might not be sufficient.

But President Gloria Arroyo said the laws looked all right, and could be improved later if necessary.

At present the Philippines does not outlaw money laundering, making it impossible to crack down on extremist groups such as the Abu Sayyaf.

It has been given a deadline of 30 September by the Financial Action Task Force - set up by the Group of Seven nations - to enact new laws or face sanctions from its members.

Kidnapping

The 1,200-strong Abu Sayyaf has received millions of dollars in ransom money through a campaign of kidnapping foreigners and Filipinos.

Abu Sayyaf group was founded in the early 1990s

The group currently holds a US missionary couple and more than a dozen Filipinos taken hostage in May.

The kidnappers said in June they had beheaded a third US hostage but this has not been confirmed.

The Philippine authorities say al-Qaeda first set up links with the Abu Sayyaf separatists in the early 1990s.

They believed Osama Bin Laden had cut the ties but General Villanueva said the recent spate of kidnappings was "part of the fingerprints of the al-Qaeda organisation... which will not stop at anything".