Around 200 mutineers took over the Ayala Center in the Makati financial district early Sunday after they were accused of plotting a coup. They have since rigged the area with explosives and put snipers on rooftops.

Surrounded by pro-government troops, the rebels sporting red arms bands and wearing camouflage demanded that Arroyo and her cabinet step down, accusing them of fostering corruption and sponsoring terrorism.

Arroyo said the rebellion was a coup attempt which had no support among the military top brass or the population. She ordered the rebels to surrender and return to barracks by 5:00 pm (0900 GMT) or face a full-blown assault.

"Past this deadline, the Chief of Staff is authorized to use reasonable force to dislodge your group quickly and efficiently, and arrest you," she said.

Arroyo later issued a proclamation giving the military emergency powers to "suppress and quell the rebellion" -- the eighth military uprising in the Philippines in the past 17 years.

Rebel spokesman Navy Lieutenant Senior Grade Antonio Trillanes declined to respond, but said his forces would hold a press conference later.

The group of junior officers and enlisted men earlier allowed up to 300 foreigners and residents trapped in the Ayala Center overnight to leave on a fleet of buses.

Among those who emerged from the Oakwood Tower high-rise condominium in the center was Australian ambassador Ruth Pearce. She appeared tired and drawn, but when asked if she had felt threatened by her ordeal said "no".

The United States and Australia expressed their support for Arroyo, seen as a key partner in the war against Islamic militant terrorist groups in the aftermath of the October 2002 Bali bombing.

"No one should be under any doubt that we fully support the legitimate civilian government of President Gloria Macapagal Arroyo," State Department spokeswoman Joanne Moore said.

Speaking in Singapore, Australian Foreign Minister Alexander Downer said his government considered the rebellion "entirely unacceptable".

"This comes at a very difficult time when the Philippines is in the forefront of the war against terrorism," Downer said. "The last thing any of us wants at this time is this kind of instability."

The rebels took over the complex of high-rise apartment blocks and shopping centers hours after Arroyo accused the soldiers on television of attempting a coup. She ordered their arrest and vowed the "maximum" penalty for them.

Rebel spokesman Trillanes denied the group was trying to stage a coup.

"We mean no harm to anyone. We are putting these (bombs) to defend ourselves," he said.

The mutineers identified themselves as "the Magdalo group," a name similar to one used by a band of Filipino revolutionaries who fought Spanish colonial rule in the 19th century.

Trillanes was among 10 officers who were identified as being part of the plot, all of them under 32 years of age. They made their statement standing against a red flag with a white sun symbol in a video aired on television.

They wanted the government disbanded and demanded what they called a "national recovery program".

The rebels claimed to have some 2,000 military supporters and Interior Secretary Jose Lina charged ex-military coup plotter-turned opposition senator Gregorio Honasan with involvement.

Honasan, a former army colonel, popularly known as "Gringo", led two of the seven bloody coup attempts in the 1980s but was pardoned under a peace deal after which he entered politics.

Rumors that a military clique was plotting to overthrow the government gripped Manila last week but Arroyo dismissed them when she met with a group of disaffected junior officers unhappy over pay and corruption.

The mutineers Sunday accused the government of selling ammunition and weapons to Muslim separatist and communist rebels and blamed it for a series of deadly bombings this year in the southern Philippines.

The group also accused Arroyo of planning to declare martial law in August, by using a series of bombings in the capital as the pretext, to stay in power after her term ends following May 2004 elections. She has promised not to contest the polls.

Arroyo, who came to power in a military-led popular uprising in January 2001, received full support from military chief of staff General Narciso Abaya.

Security was beefed up at the presidential palace with armed guards ringing the perimeter of the compound. Other key installations have been secured.

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