We have closed the negotiations so it is up them (the government) to look for the dead body if they want to

Abu Sayyaf leader Abu Sabaya

The leader of the group, Abu Sabaya, made the statement in a local radio interview, after the Philippine Government said it was standing by its policy of not entering into talks.

He also indicated that the rebels might kill the hostages, missionary couple Martin and Gracia Burnham, who were captured from a holiday resort nearly a year ago.

More than 1,000 US troops are currently in the southern Philippines helping to train local soldiers against the rebels.

Threat to kill

"We have closed the negotiations so it is up them [the government] to look for the dead body if they want to," Mr Sabaya told local radio RMN.

Asked if he meant that his group would kill the Burnhams, he answered: "It depends. For example, if we see our situation becoming difficult, maybe we will just bid goodbye to these two."

The Abu Sayyaf group has already killed several Filipino hostages, and an American man, Guillermo Sobero, was found beheaded last year.

The message from Abu Sabaya came just days after he said the rebels were open to "last deal" talks.

Ransom

The Philippine Government has always refused to negotiate for the release of the hostages, who are being held in the jungles of Basilan island.

Protesters say US troops are increasing the country's militarization

But last week the father of Martin Burnham told Philippines radio that his family had paid a ransom to let his son and daughter-in-law, along with a Filipino nurse, go free.

He said the rebels reneged on the deal.

On Tuesday Philippine police were involved in a shoot-out with a group suspected to be linked to the rebels, who were found to be holding arms and two extortion letters intended for local businesses.

The letters were signed by Abu Muslim al-Ghazi, who earlier claimed responsibility on behalf of the Abu Sayyaf for the triple bombing in the southern city of General Santos 10 days ago.

Four of the attackers were shot dead by police and the others escaped.

The Abu Sayyaf rebels say they are fighting for an independent Islamic state in the south of the country, but they are best known for engaging in kidnap for ransom.