MANILA (AFP) - The Philippine govt has scrapped its controversial peace deal with the Muslim minority after two weeks of deadly clashes in the south, the presidential palace said Thursday. The pact signed last month between leaders of the mostly Christian nation and the Moro Islamic Liberation Front (MILF) had called for a Muslim homeland to be established on the revolt-hit southern Mindanao island. "Cancellation of the Memorandum of Agreement on Ancestral Domain (MOA-AD) is a painful step," said Presidential spokeswoman Lorelei Fajardo, referring to the peace agreement by its official name. Fajardo said President Gloria Arroyo was "sensitive" to the objections of local Christian leaders, who are opposed to the agreement and have taken to the streets branding it a "sell-out." "The President is committed to peace," Fajardo told journalists. "The administration is sensitive to public sentiments and the president is also committed to upholding the constitution. "In doing so she will seek a new agreement within the boundaries of the law set within the constitution. "The President will not allow adventurism by MILF forces to pressure government to sign any agreement, even if it is for peace," she said. In a speech Thursday, Arroyo said "the focus of our (peace) talks shall shift from armed groups to the community." MILF Vice-Chairman Ghadzali Jaafar said attempts to renegotiate the agreement were unacceptable, adding that "as far as the MILF leadership is concerned, the MOA-AD is already a done deal." He said the 12,000-strong group would not renegotiate the draft, "even if it means an indefinite postponement of the 11-year-old peace process." Presidential adviser Gabriel Claudio told reporters that this "shifting of focus is not abandonment of negotiations with the MILF," but that there would be more emphasis on consultation with affected communities. On August 4, the Philippine Supreme Court issued a temporary restraining order against the agreement following protests by several politicians who saw it as "unconstitutional." Described as a "landmark deal," the proposed agreement would have paved the way for a "comprehensive compact" to end 40 years of bloodshed which has left more than 120,000 people dead and tens of thousands displaced. The pact had called for the establishment of what amounted to a state within a state in the south for Muslim Filipinos with its own "basic law," and government institutions. Fajardo said any further peace accord would be forged only in consultation with local and national politicians. Peace efforts would now focus on "authentic consultations with the people (and not) negotiations with armed groups," she said, without naming the MILF. The policy towards such armed groups "will be about disarmament, demobilisation and rehabilitation," she said. Claudio said that in further talks with the MILF, there would be more emphasis in the group showing its "sincerity" such as by "bringing to justice those elements... responsible for the pillage and raids and acts of banditry." Meanwhile, sporadic fighting with MILF forces continued in the south with two soldiers hurt in a clash with Muslim fighters in the town of Midsayap on Thursday, the military said. Local residents also reported seeing three MILF fighters wounded in the fighting, provincial governor Migs Dominguez said.