(MANILA) - The European Union on Tuesday condemned the "indiscriminate" killing of civilians in the southern Philippines amid a surge in Muslim separatist violence, warning it could affect future aid.

The unrest in the Mindanao region has claimed the lives of more than 40 civilians and displaced more than half a million people since the fighting started in early August.

"The European Union is deeply concerned by the escalation of violence in Mindanao, the growing number of civilian casualties and displaced persons. It particularly condemns the indiscriminate killing of civilians and calls for those responsible to face the due process of law," it said in a statement.

"The European Union is also concerned that civilian militias may become embroiled in the violence. This is particularly worrying and has the potential to inflame sectarian violence," it added.

The violence was sparked after the Supreme Court blocked a draft peace agreement that would have given the Muslim minority substantial control over large areas of the south.

The EU bloc said the conflict "can only be resolved through dialogue and calls upon all parties to show restraint and genuine respect for the rule of law."

It urged Manila and the rebel Moro Islamic Liberation Front (MILF), "who both have invested heavily in the peace process, to agree to an early return to the negotiating table in order to seek a lasting solution to the conflict".

The European Union said it continued to support development programmes in the region, but it cautioned that they "could be jeopardised if the violence continues."

Mohagher Iqbal, chief MILF negotiator, told reporters he did not see peace talks resuming anytime soon due to government demands that the 12,000-member group surrender two leaders blamed for the pillaging of villages last month.

He rejected a government proposal that talks should restart from scratch, scrapping the preparatory document blocked by the Supreme Court.

"That will not happen, so no peace talks will happen," Iqbal added.

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