Manila: The Philippine government and a major separatist Muslim group signed a memorandum of understanding for the creation of a larger ancestral domain for Filipino-Muslims in the southern Philippines, a spokesman said.

Both sides have agreed and signed an informal draft on ancestral domain in Kuala Lumpur late on Sunday. The signing of the formal agreement on ancestral domain was scheduled between August 5 and 6, said Mohagher Iqbal, chief negotiator of the Moro Islamic Liberation Front (Milf).

The Philippine government, in turn, promised that the Congress will amend a law to allow a third referendum for autonomy on 712 Muslim-dominated provinces, to be held from six months to one year, said a government negotiator who requested for anonymity.

Other sources said the Philippine government negotiators did not want to commit a time frame for the holding of the referendum.

A vote of yes would make the 712 villages part of the Autonomous Region for Muslim Mindanao (ARMM) which has five provinces and one city as members, said the same government negotiator.

Christian political leaders and Muslim families in the south have been against ARMM's expansion.

The government and the Milf concluded the contentious talks on ancestral domain ahead of President Gloria Arroyo's annual State of the Nation Address yesterday.

The formal signing of the agreement on ancestral domain will pave the way for the formal continuation of the peace talks, prior to the concluding of a final peace accord.

- with inputs from Ed General, Correspondent, Mindanao