The first meeting of the Philippine-Australia Defense Cooperation Working Group comes despite Australia's bitter criticism of the Philippines' pullout of its troops from Iraq in July, in compliance with the demands of Iraqi militants holding a Filipino truck driver hostage.

The meeting at the military headquarters in a Manila suburb, will take up the strategic dialogue between the two countries, efforts to reform the poorly-equipped Philippine military and cooperation on maritime security and counter-terrorism, a statement from Manila said.

The Philippine side is represented by assistant secretaries of the two countries' defense departments, Alejandro Melchor of the Philippines and Ben Coleman of Australia.

Australia has been a close defense ally of the Philippines and has been highly concerned about the presence of members of the Jemaah Islamiyahterror network in the southern Philippines.

Security officials say JI members are being sheltered in the south by local Muslim separatist guerrillas who are negotiating peace with the government. However President Gloria Arroyo has said the local rebels have cut their ties to the JI as part of the peace process with Manila.

The JI, considered the Southeast Asian chapter of the Al-Qaeda terror network, has been blamed for the 2002 Bali bombings and the bombing of Australia's Jakarta embassy last month.