Separatist movements in the three southern provinces in Thailand have agreed to drop their demand for independence in exchange for amnesty, better economy development, more fund and usage of Malay language in schools, Malaysia's staterun news agency Bernama said on Wednesday.

 The Thai Government, however, wanted ceasefire and militants to hand over weapons in the restive provinces where more than 1,700 had died since separatists launched a campaign of bombings and shootings in January, 2004, Bernama quoted the report as saying.

But Thai officials, who spoke on condition of anonymity, said the government do not see the exile leaders and their separatist groups as a real security threat. They said the separatist leaders are of the previous generations whose armed wings have virtually vanished and the number of foot soldiers they have on the ground are very minimal.

What concerns the government and the country's security apparatus is this generation of militants are organised as small independent cells and operate from the within the villages in which they live.

At least 90 per cent of the all the villages in the three southernmost provinces, and three Malayspeaking districts in Songkhla, have at least one cell that emerged some what organically over the past five years.

"These villagebased militants are of an entirely new generation with no interest in negotiation. They are behind vast majority of the violence in the region," another officer said.

Those attending the talks over this past years were separatist leaders and members who live in Malaysia. Many have been granted Malaysian citizenship but continue to take up the struggle of the Malayspeaking region in Southern Thailand as their cause.

Putrajayabased Perdana Global Peace Organisation (PGPO), which is headed by former Malaysian Prime Minister Dr Mahathir Mohamad, brokered the talks between the two sides.

Bernama quoted PGPO executive director Datuk Mukhriz Mahathir, who was involved in the talks, as saying the content of the draft was agreed by both sides during the talks and that the Thai government has yet to respond, probably due to the political situation in the country.

"We have played our part in getting both sides to talk. The draft is ready and we have sent to them. In fact, the separatists have agreed to the content and is ready to sign, we are just waiting for the Thai Government to give the goahead," he told Bernama.

Thai negotiators declined to comment publicly but one of the officers said PGPO is trying to "package" the talk in a "simple, neat and clean" manner.

"They (separatist leaders at the negotiation) have told us that they have no influence over this generation of insurgents," said one senior Thai intelligence officer. 

The idea behind talking with the separatist movements was centred on how to let them back to their birthplace in Thailand with the hope that they could help ease the tension between the Malayspeaking community and the rest of the country, he added.

Groups like the Patani United Liberation Organisation (Pulo) has said earlier this year that they have given up demand for independence, while leading exile figure like Wan Kadir Che Man, two years ago, had expressed desire to return to Thailand and worked towards reconciliation, the officer pointed out.

Thai political leaders could not agree on Wan Kadir's request and the Malaysian government sent him into exile in Sweden.

There is a growing concern in Thailand that the ongoing bickering between Mahathir and the Kuala Lumpur government could hampered the progress. Although officially the Kuala Lumpur denies any involvement, the talk would have never got off the ground if the central government did not give their a nod, another officer said.

Bernama said the agreements were included in a draft of the Joint Peace and Development Plan for South Thailand which was made following months of talks in Langkawi and Putrajaya between the separatists and Thai Government representatives.

 "The separatist leaders agreed but with condition that all those blacklisted by the authorities will be given amnesty," he said.

Mukhriz said among those attended the talks were leaders of Bersatu, Pulo, BRN (Barisan Revolusi Nasional), BIPP (Patani Islamic Liberation Front) and GIMP (Muslim Mujahideen Movement of Patani).