THE ARMED Forces of the Philippines today warned Abu Sayyaf bandits they would pay a "heavy price" if they went ahead with a threat to behead three American hostages.

Abu Sayyaf spokesman Abu Sabaya on Thursday warned the authorities they would behead the Americans among 13 hostages being held in the southern Basilan island if two Malaysians are not included as negotiators.

He gave the government a 72-hour deadline from Thursday afternoon to implement their demand, failing which they would go ahead with the executions.

"There are no reports that they have beheaded (the Americans) and we hope they would not do that because they would have a heavy price to answer," Armed Forces spokesman Brig. Gen. Edilberto Adan told a news conference.

Adan said the rebels are believed to be heading towards Basilan's coastline to escape a massive military manhunt, five days after they escaped an assault that left 16 soldiers and government militiamen dead and 46 others wounded.

"It would be hard for them to escape Basilan, but they would attempt," he said, adding that troops were scouring the slopes of Mount Sinangkapan on Basilan, the rebels' known stronghold.

He said the authorities would "check the value" of Sabaya's request that former Malaysian senator Sairin Karno be allowed to mediate in the hostage crisis as he also revealed that the kidnappers had asked for businessman Yusop Hamdan to join negotiations.

The Abu Sayyaf snatched 20 hostages, including the three Americans, from a resort off western Palawan island two weeks ago, and brought them to the town of Lamitan on Basilan where they stormed a hospital compound.

Nine hostages escaped during a fierce gunbattle between the guerillas and the military but two others were killed.

The Abu Sayyaf took four more people hostage from the hospital after slipping a military cordon.

"We still believe they are still in Basilan, (where) our troops are on alert," Adan said.