Updated

The leader of the largest Muslim rebel group in the southern Philippines said Monday that yearslong talks with the government have reached a "make or break" stage. Al Haj Murad Ibrahim expressed hope a peace accord could be reached but warned the guerrillas are ready to return to war if the negotiations fail.

Murad said his group, the 11,000-strong Moro Islamic Liberation Front, and government negotiators will tackle difficult issues, including wealth and power-sharing and the size of an autonomous Muslim region, in the next round of talks brokered by Malaysia later this month. He spoke to reporters after the rebels held a four-day gathering of thousands of fighters and supporters to discuss the talks in their main stronghold in southern Maguindanao province.

Murad said the talks "have hardly moved" in two years of negotiations under President Benigno Aquino III. But he acknowledged that both sides made progress in April when they agreed on principles and a framework for the talks.

"Virtually, the status is 'make or break,'" he said. "Anything can still happen any moment."

While Murad expressed hope that a peace accord could be forged, he said the guerrillas are ready to take up arms again if the talks go nowhere.

Government negotiators have been more optimistic, expressing hope that a peace accord could be signed as early as this year. A cease-fire watched by a Malaysia-led contingent has drastically reduced bloody clashes and fostered the negotiations, they said.

Guerrillas have waged a bloody insurgency for self-rule since the 1970s in the southern Mindanao region, homeland of minority Muslims in the predominantly Roman Catholic Philippines. Murad's group has dropped their demand for independence but is seeking establishment of a "Bangsamoro state" with broad powers under the central government in Manila.

The Supreme Court rejected a preliminary peace pact in 2008 that sought to expand an existing Muslim autonomous region, ruling that it was unconstitutional. The rejection prompted three rebel commanders to launch attacks on Christian communities in the south, sparking a major military offensive and displacing large numbers of people.

The conflict has killed more than 120,000 people in the last four decades and held back development in the resource-rich but impoverished region.

The United States and other governments have backed the talks, hoping that the region could be turned into a growth center instead of a possible breeding ground for local and foreign extremists.