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U.S. Says Spy Allegation Is 'Ridiculous'

A Philippine official says the government is considering a tougher approach toward Muslim rebels who this week kidnapped an American man and are threatening to kill him.

Abu Sayyaf rebels announced Tuesday they had abducted Jeffrey Schilling of Oakland, Calif. CBS News Correspondent Barry Petersen reports the group is still holding 18 other hostages on Jolo island after releasing six captives earlier this week for a reported $6 million paid by Libya.

Critics have warned that the ransom payment will encourage more kidnappings in the southern Philippines.

"We cannot go on like this," said Presidential Executive Secretary Ronaldo Zamora. "Otherwise we will be doing exactly what those against ransom have been saying right from the beginning. We are just setting ourselves up for more problems in the future."

In a radio interview, rebel spokesman Abu Sabaya said the guerrillas are willing to begin negotiations with U.S. Embassy officials on Thursday for Schilling's release. But he demanded that representatives of North Korea, China, Iraq, Saudi Arabia and Libya take part in the talks.

"We have been trying very hard to get an American because the Americans may think we are afraid of them," said Sabaya.

The rebels say they will announce their demands in two days. They also say they will kill Schilling if the United States does not meet their demands.

The Abu Sayyaf, the smaller of two main Muslim rebel groups fighting for an independent Islamic state in the southern Philippines, is made up of several factions often working independently.

Schilling is being held by the same faction that kidnapped about 50 schoolchildren and teachers in March on neighboring Basilan island. The group beheaded two teachers after the United States ignored their demand for the release of several Arab terrorists held in U.S. jails.

The U.S. Embassy said the American government would make no deal with the rebels.

"We will not pay ransom, change policies, release prisoners, or make any concessions that reward hostage-taking," it said.

Sabaya said the rebels believe Schilling is a CIA agent because he had introduced himself as a Muslim convert but knew little about Islam.

U.S. Consul General John Caulfield called the allegation "ridiculous."

"This individual is a completely innocent person who has been unjustifiably seized," he said. "We want to see his immediate release and we look to the Philippine government to do everything possible to secure that."

Schilling arrived in the Philippines on March 8 and has been living with his Muslim Filipino girlfriend, Ivi V. Osani, in southern Zamboanga city.

Osani's mother, Aida Ajijol, said Osani and Abu Sayyaf spokesman Sabaya are second cousins. Sabaya had invited the couple to visit the rebels' camp on Jolo, she said.

In Oakland, Schilling's mother, Carol, said her son went to the Philippines partly because of a longtime interest ithe region but stayed after he fell in love with Osani.

"I tried to get him out of the country three times but he didn't come out. He was too much in love," she said.

"I had looked forward to him coming home, and now I'm just scared," she said, her voice trembling and her eyes rimmed red.

Zamora said the government had been forced to negotiate with the Abu Sayyaf after they abducted 21 people, mostly foreigners, in April because of pressure from their governments for a nonmilitary solution.

In contrast, he said, the United States has taken a more aggressive approach toward international terrorism.

Asked if the United States is considering military action, Caulfield replied: "I am not going to speculate on any area like that."

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