MANILA: The Philippine government and the country's biggest Muslim rebel group announced Sunday they had agreed a deal to end a decades-long separatist insurgency that has killed more than 150,000 people.

The agreement would see the establishment of a new semi-autonomous Muslim area in the resource-rich southern Philippine region of Mindanao, which the 12,000-strong Moro Islamic Liberation Front regards as its ancestral homeland.

“This framework agreement paves the way for a final and enduring peace in Mindanao,” President Benigno Aquino said in a nationally televised address.

“It brings all former secessionist groups into the fold. No longer does the Moro Islamic Liberation Front aspire for a separate state.” The MILF hailed the breakthrough, which was achieved in the latest round of peace talks in Malaysia that ended on Saturday, as the “beginning of peace”.

“We are happy and we thank the president for this,” MILF vice chairman for political affairs Ghazali Jaafar told AFP by phone from his base in Mindanao.

US Secretary of State Hillary Clinton called the agreement “a testament to the commitment of all sides for a peaceful resolution” to the conflict.

“The next steps will be to ensure that the framework agreement is fully implemented,” she said in a statement.

The Philippine government and the MILF said they were aiming to reach a final peace deal before the president's term ends in the middle of 2016. But they also pointed to major obstacles to be overcome.

Aquino said a final agreement would have to be approved by a plebiscite.