MANILA, Philippines -- Muslim separatists angered at stalled peace talks with the Philippine government could start a bombing campaign in the south of the archipelago, analysts said on Thursday.

The government and the Moro Islamic Liberation Front (MILF) were supposed to sign this month a deal on setting up an ancestral homeland for three million Muslims in the south of the mainly Roman Catholic state.

But the two sides disagreed over the text of the proposed agreement in Kuala Lumpur last month, yet another breakdown in over a decade of talks to try and end a nearly 40 year conflict that has killed over 120,000 people, mainly on the southern island of Mindanao.

"We're expecting the hardliners within the MILF to breakaway from the mainstream rebel group and continue their struggle for independence with or without a peace deal," said a military intelligence officer, who declined to be named.

"We're expecting some foreign jihadists from Indonesia, Malaysia, and Singapore to work with these radicals to carry out attacks against some targets in the south. There's a lot of them hiding in Muslim communities on Mindanao," the military intelligence officer said.

Army intelligence units are closely watching the small but more radical elements within the MILF because they can start winning support from among rebels impatient at the pace of talks.

The MILF has around 11,000 members and the military intelligence officer said around 10 percent could splinter off from the main group.

A counter terrorism expert also warned that foreign militants who used the Philippines remote islands to train and plot would take advantage of frustration within the MILF.

A handful of militants belonging to regional terror group Jemaah Islamiah are believed to be hiding in the south, including two of the main suspects in the 2002 Bali bombing.

"Alliances by the extremists with transnational terrorists, including Jemaah Islamiah will become much more of a factor... their voices becoming more prominent with the Muslim rebel groups," Christopher Collier, a counter terrorism expert at Australia's National University, told reporters at the Foreign Correspondents’ Association of the Philippines on Thursday.

"Since the arrests in Indonesia, the jihadists' structure has broken down so many of these extremists had become freelancers who are running around and transferring their skills to local insurgents," Collier said.

He said the number of people who had trained on Mindanao under this group of freelancers would be even bigger than those who had gone to Afghanistan to train in the 1980s and 1990s.

"Over the next few years, what we need to be worried about is the growing number of these Mindanao alumni who would start filling in the shoes of the older Afghan alumni because they would be more capable of carrying out mass casualty attacks."