The Philippines intends to grant diplomatic status to 60 monitors from Malaysia and Brunei due to arrive on Saturday to oversee a year-long truce between troops and Muslim rebels, an army official said on Wednesday.

Peace talks hosted by Malaysia are expected to resume soon after the deployment of the team on Mindanao Island next week.

The 35-year separatist conflict in the south of the largely Roman Catholic Philippines has killed at least 120,000 people.

Brigadier-General Alexander Yano, head of the government's ceasefire panel, said diplomatic immunity for members of the monitoring team was part of a proposed set of rules covering their status and activities.

"This proposal will still have to be approved in a tripartite meeting that includes the Malaysians, our government and the rebels," Yano told Reuters. "That is just a formality."

Malaysia, a mostly Muslim nation, has been brokering peace negotiations between the Philippine government and the Moro Islamic Liberation Front (MILF) since 2001.

The presence of the monitors on Mindanao is one of three conditions set by the MILF for formal talks to resume.

Manila, which is also fighting communist insurgents and other Muslim rebel groups, is keen to seal a peace deal with the MILF to improve the nation's security and investment climate and develop resource-rich but impoverished Mindanao.

As the equivalent of embassy staff, the monitors will not be liable for mission-related offences, including car crashes and accidental shootings.

Yano said the monitors would wear their own uniforms and carry pistols, even though Philippine troops would provide security.

The rebels have given assurances of safety for the monitors.

The 60-member team of soldiers and police will be deployed for a year in five areas of Mindanao to observe the ceasefire, verify any violations and prevent conflicts from escalating.

Malaysian diplomats said most of the monitors from their country were veterans of peacekeeping operations in Kosovo.

Yano said the term of the monitors could be extended at the request of the Philippine government and the rebels.

The monitors can decide to cut short the mission if the situation on the ground becomes too dangerous.