Blast outside church in Philippine south, two dead

MANILA, July 5 (Reuters) - A bomb exploded outside a church in the southern Philippines during Sunday morning mass, killing two people and wounding eight, an army spokesman said.

Rogue Muslim rebels were suspected of placing the bomb outside the church in Cotabato City, said Colonel Jonathan Ponce.

"This is the handiwork of the rogue members of the Moro Islamic Liberation Front (MILF)," Ponce told reporters.

"The rebels are getting desperate and they are no longer choosing their targets. They are now attacking even places of worship."

Ponce said the crude bomb, made from a mortar shell and remotely detonated by a mobile phone, was placed near a stall selling food.

Mohaqher Iqbal, a senior leader of the MILF, the largest Muslim rebel group in the mainly Roman Catholic Philippines, denied his group was involved in the attack.

"Who needs a Christian-Muslim conflict?," Iqbal told Reuters in a mobile phone text message.

"There's no religious conflict in the south. We're fighting for our right of self-determination. We're only defending our people and our communities."

However, rogue members of the MILF have been fighting the army since August, when the government ended peace talks with the MILF after a deal to expand an existing Muslim autonomous region on the southern island of Mindanao was stopped by the Supreme Court.

Nearly 600 people have been killed since then, many of them civilians caught in the fighting.

Fighting around the marshlands on central Mindanao has escalated in the last eight weeks, forcing more than 350,000 people to flee their homes and farms and pushing back any chance of resuming the peace talks. [ID:nMAN416748] [ID:nMAN494095].

The 40-year Muslim separatist conflict on Mindanao is driving away potential investments into the impoverished region, believed to be sitting on rich deposits of minerals, oil and natural gas. (Reporting by Manny Mogato, Editing by Jerry Norton)