JOLO, Philippines, May 17 (AP) - Muslim rebels holding 21 Western and Asian hostages have issued their first written conditions for the captives' release, including the creation of an independent Islamic state - a demand the Philippine government has repeatedly refused.

The stipulations are likely to complicate and prolong negotiations with the Abu Sayyaf rebels, which were scheduled to start this week.

Earlier demands included $1 million and then $2 million for the release of an ailing German captive, Foreign Secretary Domingo Siazon said today in China, where he was traveling with President Joseph Estrada.

The Abu Sayyaf, the smaller and more extreme of two Muslim separatist groups fighting in the impoverished south, also asked for an international investigation into the plight of Muslims in the region.

The highly political two-page manifesto described the kidnapping as a ``minor thing'' compared to injustices suffered by the Philippines' Muslim minority. Muslim people ``have been a hostage of the Philippine government,'' said the manifesto, provided to journalists Tuesday. ``The Philippine government kidnapped the sovereignty'' of Muslims, it added.

Muslim sultanates existed in what is now the southern Philippines before Spain colonized the territory in the 1500s. Colonial governments converted much of the rest of the nation to Christianity but failed to fully subjugate the Muslim areas, which have continued to resist domination from Manila.

It was not clear if the rebels planned to present the manifesto to negotiators. Government negotiators have insisted that the splintered Abu Sayyaf leadership decide on a single list of demands and present it in writing.

``We are talking to five leaders there, so to be sure about what they are asking for, we want them to write it down,'' chief negotiator Robert Aventajado said today. ``We want to make sure this comes from them.''

Formal talks for the hostages' freedom had been set to start today, but Aventajado told DZRH radio they would be delayed until Thursday or Friday. The rebels snatched three Germans, two French citizens, two South Africans, two Finns, a Lebanese, nine Malaysians and two Filipinos on April 23 from Sipadan Island, a Malaysian diving resort, and took them to the Philippine island of Jolo, about an hour away by boat.

On Tuesday, a European journalist who visited the Abu Sayyaf camp on Jolo allowed most of the hostages to use his satellite phone to call their families. ``They were very happy. They said it was the most beautiful gift we gave them,'' said Franck Berruyier, a journalist of Europe One radio. Red Cross workers and government negotiators have delivered letters, food and medicine.

The Abu Sayyaf are also holding about eight Filipino hostages on the nearby island of Basilan out of an original group of about 50, including many children, taken from two schools on March 20. Some of those hostages were released, 15 were rescued and six were killed.

Estrada, who flew to China for an official visit Tuesday, has been criticized for leaving the country during the crisis. He said today that he was in frequent contact with defense and military officials and government negotiators.

The Abu Sayyaf is willing to make the first negotiating topic the quick release of Renate Wallert, 57, a German hostage with high blood pressure, but her freedom depends on the government meeting certain conditions, a rebel leader, Abu Escobar, said Tuesday. Abu Sayyaf leaders were discussing those conditions, he said.

More than 250,000 people have been displaced by violence in the southern region of Mindanao since last month, when the army attacked a stretch of highway held by the Moro Islamic Liberation Front, the larger and more moderate rebel group. The MILF pulled out of peace talks in response to the attack, but offered Monday to resume negotiations.

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