The Philippine government and the largest Muslim separatist group reached a deal Wednesday to create an ancestral homeland for 3 million Muslims in the south of the mainly Roman Catholic state, officials said. The agreement, while crucial for the resumption of formal peace talks, does not guarantee the end of a near 40-year conflict that has killed 120,000 people and displaced 2 million on the resource-rich southern island of Mindanao. “We have finally settled all the remaining issues on ancestral domain,” Mohaqher Iqbal, chief negotiator of the Moro Islamic Liberation Front (MILF), told Reuters at the end of a one-day meeting brokered by the Malaysian government. “It was a tough meeting. The real battle will be fought on the next level when we start talks on the political formula to end the conflict. But, at least we have hurdled the ancestral domain issue. We can now return to formal negotiations.” Retired general Rodolfo Garcia, the head of the government's peace panel, said: “Praise God. It's over.” Manila and the 11,000-member MILF have been talking for more than a decade on how to give Muslims in the south a greater degree of self-rule, and it took the two sides nearly four years to reach this agreement on expanding the coverage of an existing autonomous region for the minority group. Many in the Philippines are skeptical about a speedy final resolution to one of Southeast Asia's most intractable conflicts, but the government reiterated its optimistic stance. “We are happy that the talks are finally moving forward,” Hermogenes Esperon, the president's peace adviser, told Reuters.